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TUKO.co.ke journalist Wycliffe Musalia brings over five years of experience in financial, business, and technology reporting, offering deep insights into Kenyan and global economic trends.
Kenyans owning vehicles will pay over KSh 58 billion in motor vehicle tax by the end of June 2025.
The government proposed to collect 2.5% of motor vehicle value from car owners effective July 1, 2024, to finance the year 2024/25 Budget.
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Speaking to Citizen TV on Thursday, May 16, National Assembly Finance Committee chair Kimani Kuria explained that if passed into law, the tax will raise KSh 58.02 billion for the exchequer.
Kuria maintained that the motor vehicle circulation levy is a user-pay tax and will directly affect the users.
"The motor vehicle circulation tax is going to impact directly the users. As proposed, the levy will raise KSh 58.02 billion," said Kuria.
The National Treasury capped the tax at KSh 5,000 minimum and KSh 100,000 maximum, paid when purchasing car insurance cover.
Kuria revealed that the levy is aimed at enhancing Kenya's investment in public transport.
The Molo MP explained that with the ongoing floods, Kenya needs an extra KSh 30 billion to maintain roads and the road maintenance levy collected is not sufficient.
"The road maintenance development levy is not enough to maintain the roads, with the ongoing impact of floods. The government needs KSh 30 billion extra money to repair the roads," he said.
In October 2023, the government proposed plans to increase the road maintenance levy charged on the sale of petroleum products.
Kenya Roads Board (KRB) said the KSh 18 charged per litre of fuel and diesel was not enough to meet the road maintenance cost.
KRB cited the rising cost of road construction material, proposing a KSh 5 increase to KSh 23 to be paid by motorists.
Proofreading by Asher Omondi, current affairs journalist and copy editor at TUKO.co.ke.
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Kimani Kuria maintained that the motor vehicle circulation tax is a user-based tax.
Motor Vehicle Tax: Ruto's Govt Targets Over KSh 58b from 2.5% Levy for
Motor Vehicle Tax: Ruto's Govt Targets Over KSh 58b from 2.5% Levy for