New Finance Bill 2024 Proposes New Motor Vehicle Tax to Support Kenya Kwanza Government Projects » Capital News

NAIROBI, Kenya May 12 – The Finance Bill 2024 has proposed the introduction of a Motor Vehicle Tax, levied at 2.5% of a vehicle’s market value.

The government says the new tax is designed to provide a steady revenue stream to support the government’s ambitious development projects.

The bill specifies that the tax will range from a minimum of Sh5,000 to a maximum of Sh100,000, payable at the time an insurance cover is issued.

The amount is determined based on factors like the vehicle’s make, model, engine capacity, and year of manufacture.

Insurance companies will be responsible for collecting and remitting the tax within five working days after issuing an insurance policy.

under the new bill, insurers will be required to comply with the timeframe to ensure efficient tax collection.

If insurers fail to comply, they will face a penalty, with those failing to collect and remit the Motor Vehicle Tax being liable for a penalty equivalent to 50% of the uncollected tax plus the actual amount of the uncollected tax.

Certain vehicles are exempt from this tax, including ambulances and vehicles owned by governmental bodies such as the Kenya Defence Forces and the National Police Service, as well as those owned by individuals protected under the Privileges and Immunities Act Cap. 179.

The Commissioner is authorized to prescribe guidelines for determining the valuation of motor vehicles, which will aid in the accurate assessment and collection of this tax.

The new tax is part of a series of financial measures introduced by the Kenya Kwanza government to fund its extensive infrastructure and social programs.

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