14 Jun 2024
Kenya has proposed a 2.5% annual levy on the value of motor vehicles in the 2024/25 financial budget.
Finance Minister Njuguna Ndung'u made the announcement in parliament during budget reading on Thursday.
Under the proposed levy, motorists would pay a minimum of 5,000 Kenyan shillings ($40) yearly as tax on their vehicles.
The levy is charged on each vehicle.
Ksh100,000 ($780) cap removed
If the motor vehicle's value is high, a 2.5% deduction would be imposed.
This means that if a car is valued at 2 million shillings ($15,500), the government would take 50,000 shillings ($390), which is 2.5% of the car's value.
The government had earlier proposed to cap the annual motor vehicle ownership tax at 100,000 shillings ($780), but in the proposed budget read on Thursday, that clause had been struck off.
Kenyan motorists are already subjected to motor vehicle importation tax, clearance charges, insurance charges, and fuel taxes.
Outcry
Kenyans took to social media to express their anger over the proposed tax on motor vehicle ownership.
Treasury Ministry's Principal Secretary Chris Kiptoo said the government had considered a uniform "road maintenance levy" on all Kenyans but abandoned the plan.
"We felt that we did not need to do that because it would affect many other people who do not even have (motor) vehicles," Kiptoo told Kenya's privately-owned television station Citizen on Thursday.
As of 2021, Kenya had about 2.1 million registered motor vehicles.
The government's new tax proposal will be debated by parliament, and if approved Kenyans would have to pay more to own vehicles in the coming year.
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TRT Afrika
