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Political analyst Mutahi Ngunyi has raised questions regarding Kenyans’ defence of car owners amidst the proposed motor vehicle circulation tax outlined in the Finance Bill 2024.

The Finance Bill 2024 introduces a new motor vehicle circulation tax set at 2.5%, to be collected by insurers within a specified range.

Motor vehicle tax

Additionally, penalties for underpayment of instalment tax have been adjusted, aligning with a lower 5% penalty.

The motor vehicle circulation tax proposal has faced opposition from Kenyans, with a recent survey by Infotrak revealing that 81% of respondents are against the motor vehicle circulation tax contained in the Finance Bill 2024. Only eight per cent expressed support for the tax proposal.

Ngunyi, reacting to the survey results, highlighted the disparity between car owners and the broader hustler population, insisting that only 1.2 million out of 52 million Kenyans own cars, while the majority, approximately 40 million, will likely never own one.

In a statement shared on his social media account, Ngunyi questioned the rationale behind common Kenyans defending the interests of car owners, considering the vast majority of them do not own cars.

He further pointed out the lifestyle differences, suggesting that hustlers are unlikely to consume luxury items such as bottled water or use tea bags, indicating that President William Ruto’s taxation policies may be targeting the wealthy.

“Dear hustlers: what is your problem? Only 1.2 million Kenyans out of 52 million own cars. 40 million of you will never own a car. Question: why defend car owners if you have no car? Also: do hustlers drink bottled water or use tea bags? No! Ruto is taxing the rich. Is this wrong?” Ngunyi stated.

The comments from Ngunyi come amid growing concerns over the potential negative impact of the Finance Bill 2024 on the Kenyan economy. According to the Infotrak survey, 77% of Kenyans believe the bill will adversely affect the economy once implemented.

Finance Bill 2024

The Finance Bill 2024 introduces significant changes in both business and personal tax regulations, including broadening the definition of digital content monetization, clarifying the concept of donations for tax purposes, and expanding the scope of royalty payments.

Furthermore, the bill proposes adjustments to personal tax regulations, such as increasing allowable pension contributions and revising tax-exempt benefits. Internationally, it introduces measures aimed at ensuring fair taxation for multinational entities and facilitating advance pricing agreements for related party transactions.

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