Under the new Finance Bill 2024, the Government of Kenya proposes an annual motor vehicle tax.
This tax shall be payable to the commissioner on each motor vehicle at the time of issuance of an insurance cover.
The motor vehicle tax shall be payable based on the value of the motor vehicle at a rate of 2.5% provided that the amount payable shall not be less than ksh 5,000 and shall not be more than Ksh 100,000.
How To Pay The Motor Vehicle Tax
An insurer of a motor vehicle shall collect and remit the motor vehicle tax to the commissioner within 5 days after issuing a motor vehicle insurance cover.
The car’s value shall be determined based on the make, model, engine capacity in cubic centimeters, and the car’s year of manufacture.
Penalties Incase Of Failure To Pay
An insurer who fails to collect and remit motor vehicle tax shall be liable to pay a penalty equivalent to 50% of the uncollected tax and the actual amount of the uncollected tax.
Given that it’s illegal to drive a motor vehicle in Kenya without an insurance cover it will be hard for any vehicle owner to run away from this tax.
Vehicles Exempt to This Tax
All vehicle owners in Kenya shall be subject to the Motor vehicle tax apart from the following:
- Ambulances
- A motor vehicle owned by the national government
- County government vehicles
- Kenya defense forces vehicles
- National Police service vehicles
- National intelligence service vehicles
- A vehicle owned by a person exempt from tax under the privileges and immunities Act.
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Kevin Muya is an award-winning entrepreneur and the visionary Founder and CEO of Scepture Empire Limited. With a passion for e-commerce and digital marketing, Kevin has revolutionized online marketplaces in Kenya through innovative ideas that transform buyer-seller interactions.
If they remove the fuel tax levy, import duty, and exercise duty, it will make sense. Otherwise hiyo ni upuzi
Guess will just have to wait and see