Proposed Motor Vehicle Tax Changes in Kenya: Implications and Exemptions
Motorists might find themselves paying more for insurance coverage should the suggestions within the Finance Bill 2024 become law.
This bill, a housing tax proposal, is seen by the government as a means to generate income to fund the ambitious initiatives of the Kenya Kwanza administration.
Outlined within the bill is a new tax structure that proposes a levy of 2.5 percent of a motor vehicle’s value for insurance purposes.
This tax, dubbed the motor vehicle tax, is to be paid upon obtaining insurance coverage, as specified within the bill’s text.
According to the Finance Bill, the motor vehicle tax will be calculated based on the value of the vehicle, with rates detailed in the Third Schedule.
The minimum payable amount stands at Ksh5,000, but this figure could rise to as much as Ksh100,000, contingent uponย factors such asย the vehicle’s make, model, engine size, and year of manufacture.
ALSO READ:
- Former Deputy President Rigathi Gachagua Reveals the Truth Behind His Impeachment
- Guatemalan and Salvadoran Troops Land for Haiti Mission
- Puzzle as Woman Is Found Dead in Mysterious Circumstances Close to Her Home
- Cross-Border Attack: Nigerian Gunmen Kill 5 Cameroonian Soldiers in Retaliation
- The Late KNCHR Chairperson Roseline Odede’s Illustrious Career, Awards & Legacy
Several entities, including ambulance-operating hospitals, national and county governments, the Kenya Defence Forces, the National Police Service, the National Intelligence Service, and diplomatic personnel, are exempt from this tax burden.
Insurers are tasked with promptly remitting the collected tax within a five-day window following the issuance of insurance coverage.
ย Failure to do so could result in penaltiesย amounting toย 50 percent of the uncollectedย tax,ย plus the outstanding sum.
The bill also empowers the Commissioner to establish guidelines for determining the valuation of motor vehicles, further solidifying the taxation framework proposed.
This move, if implemented, aligns with the government’s strategy to diversify revenue streams, as recommended in the International Monetary Fund’s fifth review, completed in July 2023.
The review also emphasized the urgency of transitioning from conventional fuel-powered vehicles to electric ones to address the challengesย posed byย climate change.
Proposed Motor Vehicle Tax Changes in Kenya: Implications and Exemptions
