81 per cent of Kenyans opposed to motor vehicle circulation tax – Infotrak
81 per cent of Kenyans are opposed to the motor vehicle circulation tax contained in the proposed Finance Bill 2024.
In a poll by Ifotrak that sampled respondents from all 47 counties in the eight regions of Kenya, 81 per cent of the respondents flatly opposed the motor vehicle circulation tax with only eight per cent showing support for the tax proposal.
Also, 11 per cent of the respondents were unsure of their support or lack of it for the introduction of the vehicle circulation tax.
The chair of the Finance and National Planning Committee and Molo Member of Parliament (MP) Kuria Kimani is leading the public participation forum on the Finance Bill 2024 set to take effect on July 1, 2024.
The proposed motor vehicle circulation charge will require all motor vehicle owners to pay 2.5 per cent of the value of their vehicle annually to the state.
Collection of the tax
Insurance companies will be required to collect the payments upfront before issuing the vehicle owners with insurance covers.
The insurance company will then remit the tax within five days of issuing your cover or face a 50 per cent penalty on the uncollected amount. 
The tax is capped at Ksh100,000. This cap has elicited mixed reactions with some quarters arguing that wealthier individuals with more expensive motor vehicles stand to benefit the most.
The law has generated a heated debate through various sectors in the country with Githunguri MP Gathoni wa Muchomba saying the law would only exacerbate the already worse economic situation in the country.
“By the way, right now insurance uptake in the country is less than three per cent, so if we add these other obstacles it means then that the uptake will be lower,” she remarked on May 27, 2024.
“Don’t be lied to that this levy is targeting the rich who own vehicles because when a matatu owner pays the tax, he will increase bus fare to recoup the extra cost.”
Effects of the tax
The contentious tax proposal is projected to adversely affect the transport industry as the additional costs by vehicle owners shall ultimately be borne by the end-users.
In 2023, the Kenya Institute of Public Policy Research Analysis (KIPPRA) revealed that 80 per cent of Nairobi residents use public transport or walk to and from work.
Only one in every ten city dwellers has a private car for daily commute to and from work according to the report by KIPPRA.
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