Business

Matatu owners urge State to drop motor vehicle tax proposal

Tuesday, June 4th, 2024 05:30 | By
Albert Karakacha
Albert Karakacha. PHOTO/Print

A matatu lobby group has expressed concern over Finance Bill 2024, warning it could kill local automotive industry.

It said introduction of motor vehicle tax at a rate of 2.5 per cent of the value of motor vehicle at minimum of Sh5,000 and a maximum of Sh100, 000 is likely to discourage Kenyans from acquiring new motor vehicles and replacing the existing ones thereby killing the industry.

Matatu Owners Association (MOA) President Albert Karakacha (pictured) said that as a group the Finance Bill will affect its business because members still pay other taxes from fuel levy to insurance.

 Without amendments

“We are just telling the government that 2.5 per cent (Motor Vehicle tax) as an association we can’t support because the same vehicles are the ones carrying the hustlers,” he said, warning that eventually the cost will be passed over to the mwananchi should the Bill sail through without amendments.

The Bill proposes to introduce motor vehicle tax at a rate of 2.5 per cent of the value of the motor vehicle provided that the tax payable shall not be less that Sh5000, but shall not exceed Sh100,000.

In this case the value of the motor vehicle shall be determined bases on the make, model, engine capacity in cubic centimeters (cc) and year of manufacture of the vehicle.

According to the Bill, Motor vehicle tax will be collected by insurance companies. This, according to MOA, will certainly result in a sharp increase in the annual cost of motor vehicle ownership.

It is against the above backdrop, Karakacha said the association is set to reject the bill, urging the government to exclude the tax on the Bill.

“We have a listening President. We believe it will be put away,” he said in Mombasa on the sidelines of a Road Safety Clinic organised in partnership with GB Auto, an Egypt-based automotive that operates in trading, distributing, and marketing all transportation means.

 Karakacha urged the government to support importation and operation of 14-seater countrywide, to help Kenyans move around.

“We urge the government to support the 14-seater country wide because we believe 14 seaters are the most popular means of transport all over the country,” Karakacha said.

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