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Kenyan motor firm backs asset leasing

NAIROBI, Kenya, Jun 11 – Simba Colt Motors has lauded the move by the government to adopt motor vehicle leasing solutions and remove withholding tax on lease rentals terming it as a timely gesture.

Simba Colt Motors Chief Executive Officer Adil Popat said the provision in the 2010 budget will encourage local firms to adopt motor vehicle leasing solutions for their fleets which will spur the local formal motor industry’s growth.

The proposed trend-setting move by the government to adopt leasing solutions for its own vehicle fleet, Mr Popat said, is particularly endearing to the local motor industry with the government standing to save more than 30 percent of its resource allocation for new motor vehicles.

Such a leasing option will also help boost the government’s service delivery capacity to the people of Kenya.

Mr Popat added that the motor industry is also looking forward to the specifics of a provision outlined in the budget pledging to ensure the support of local vehicle assembly plants as part of the government’s commitment to create linkages with industries to sustain SME’s growth and employment.

“As the major player in motor vehicle leasing in Kenya, Simba Colt Motors welcomes the move by the government to adopt motor vehicle leasing solutions in a move that will undoubtedly help spur the local motor industry,” Mr Popat said.

“It’s particularly encouraging to note that the government has committed to jump start this process and act as a lessee in a move that will have a major multiplier effect even in the private sector,” he said.

By adopting motor vehicle leasing, the government is also set to create further employment opportunities effectively managing to facilitate economic development.

In his budget speech delivered on Thursday afternoon Finance Minister Uhuru Kenyatta announced that the government was stepping in to remove withholding tax imposed on lease rentals and indicated plans for the government to adopt vehicle leasing solutions.

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Fleet outsourcing through a leasing solution helps to reduce the risk and complexity associated with motor vehicle ownership, whilst providing a seamless transport solution that will greatly improve service delivery by the government and parastatals.

“The primary benefits include eliminating asset and maintenance risks, flexibility of fleet composition, reduced administrative burden and ensuring a modern fleet that is fit for particular purposes,” Mr Popat explained.

Leasing, Mr Kenyatta acknowledged, remains a powerful and viable vehicle toward promoting business growth and facilitating Government to effectively provide services.

“We have made progress in encouraging leasing in our country, we recognise more still needs to be done to promote leasing for faster growth and employment,” he stressed.

While noting that the new move is geared at improving cash flow for lessors and lessees, Mr Kenyatta confirmed that the government is set to lead by example by becoming a major player in the leasing industry.

“The Government will adopt leasing and mortgage as a vehicle for providing cheaper access to assets necessary for enhancing service delivery,” Mr Kenyatta said.

“Through this process, the Government would be able to unlock resources to frontload financing of critical public services and development, especially provision of housing and vehicles to the disciplined forces,” he said.

Through the Simba Colt Motors fleet leasing solution, local firms and SME’s are afforded an opportunity to strategically focus on their core businesses rather than dealing with the many administrative issues associated with managing a fleet and capital outlay.

Through the years, Simba Colt Motors Ltd has developed various vehicle leasing options that offer the ultimate in value, flexibility and practicality. All leases can be tailored to specific fleet management requirements.

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