Kenya: Reprieve for Motor Vehicle Owners As 2.5 Percent Tax Removed

Nairobi—The government has removed the proposed 2.5 percent levy on motor vehicles from the Finance Bill 2024. Finance and Planning Committee chairperson Kimani Kuria announced that the tax, initially intended to expand the tax base, would have made the insurance industry unsustainable and hindered revenues. The removal follows a previous adjustment that eliminated the cap on motor vehicle taxes, which would have significantly increased costs for buyers of expensive cars. Treasury Cabinet Secretary Njuguna Ndung’u had earlier proposed a minimum annual tax of Ksh 5,000, aimed at making the country more self-reliant.