Vehicle owners to pay Sh100,000 in new tax proposals
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The Finance Bill 2024 has proposed the introduction of a Motor Vehicle Tax, with a rate of 2.5 percent of the vehicle's value
The Finance Bill 2024 has proposed the introduction of a Motor Vehicle Tax, with a rate of 2.5 percent of the vehicle’s value.
The minimum tax payable to the Commissioner on each vehicle at the time of the issuance of an insurance cover will be Sh5,000 with a maximum amount of Sh100,000.
The Bill stated that the calculation would be based on make, model, engine capacity, and year of manufacture.
Additionally, an insurer of a vehicle is expected to collect and remit the motor vehicle tax within five working days after issuing an insurance cover.
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The Bill warned that an insurer who fails to collect and remit the motor vehicle tax shall be liable to pay a penalty equivalent to 50 percent of the uncollected tax and the actual amount of the uncollected tax.
The tax is exempted to ambulances, and motor vehicles owned by the national government, county government, Kenya Defence Forces, National Police Service, National Intelligence Service or a person exempt from tax under the Privileges and Immunities Act Cap. 179.
“The Commissioner may prescribe such guidelines as may be appropriate for determining the valuation of a motor vehicle,” the Bill added.
The Bill contains tax proposals that the Kenya Kwanza government wants to use to raise revenue and finance its ambitious projects.
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