NAIROBI, Kenya, June 18 – The government has removed the 2.5 percent proposed levy on motor vehicles in the proposed Finance Bill 2024.
Finance and Planning Committee chairperson Kimani Kuria stated in an address to the press that the earlier proposal to introduce the wealth levy would make the insurance industry unsustainable and hence slow down revenues from the government.
“We have agreed that the motor vehicle tax cannot be amended through an Income Tax Act and pegging it on insurance would cripple the insurance business and make it difficult for Kenyans taking third-party insurance,” said Kuria.
Earlier, the government removed the cap on motor vehicles at Sh100,000, meaning buyers with expensive cars would have paid in excess of over Sh400,000 in taxes.
The minimum annual tax payable was capped at Sh5,000, ensuring that even lower-valued vehicles contribute to the nation’s revenue, according to Treasury Cabinet Secretary Njuguna Ndung’u.
”To expand the tax base and make our country self-reliant, I propose to introduce an annual motor vehicle tax at the rate of 2.5% of the value of the vehicle subject to a minimum amount of Ksh 5,000 per annum,” he said.
