Molo Constituency member of parliament (MP) Kuria Kimani, who is also chair of the National Assembly Finance Committee has defended the government’s proposal to tax car owners through a motor vehicle circulation tax.

The motor vehicle tax has been included in the new Finance Bill 2024 which seeks to introduce an annual tax that will be paid during motor vehicle insurance cover acquisition. 

According to the Bill, the minimum amount for the vehicle tax is Ksh.5,000, which should also translate to 2.5 percent of the vehicle’s value.

Speaking during an interview with NTV on Tuesday May 14, 2024, Kimani described the levy as a hybrid of income and wealth tax.

According to the MP, the move of taxing vehicles will encourage investment in public transport and minimize the use of private cars.  

“If you don’t want to pay the motor vehicle circulation tax, then don’t use the car. If you don’t want to use the expressway, then don’t pay for it and use other means,” he said. 

In addition, he advised car owners opposed to the tax to avoid using personal cars and instead use public transport. 

“If you go to economies ahead of us, there are elaborate and very efficient public transport systems,” he added.

He revealed that most investors are shying away from investing in public transport in the country because majority of Kenyans prefer the comfort of personal cars. 

“Every time investors want to invest in our public transport system through public-private partnerships, the feasibility studies show that we like to drive our cars so much that we are not able to attract foreign investment,” he said. 

However,  ambulances, and government-owned vehicles are exempt from the motor vehicle circulation tax as stipulated in the Privileges and Immunities Act.

If the bill is passed, car owners who fail to remit the tax within five working days after issuing of motor vehicle insurance cover shall be liable to a penalty of fifty percent of the uncollected tax.