If you own a vehicle or planning to buy one, RUTO is looking for you as he introduces a new annual tax to all vehicles in Kenya – Look!

Thursday, February 22, 2024 – In his bid to raise revenue, President William Ruto, through the National Treasury, has unveiled plans to introduce the Motor Vehicle Circulation tax, which will apply to all vehicle owners in the country.

According to the 2024 Budget Policy Statement that was tabled in Parliament, Ruto’s government is targeting to raise revenue through the enforcement of the wealth tax.

As outlined in the 172-page document, the tax will be set at a flat rate for all vehicles and an additional charge based on the engine capacity of the vehicle.

The Treasury outlined that the taxation would be progressive and is scheduled to be implemented between the upcoming financial year, 2024/2025, and the 2026/2027 financial year.

"The Government will introduce Motor Vehicle Circulation tax, in the medium term, on all motor vehicles based on a flat rate or on the engine capacity of the vehicle to improve progressivity. 

"In the design of the tax, exemptions will be provided for certain categories of motor vehicles," read the policy statement.

As detailed in the Treasury Medium-Term Revenue Strategy, the tax will be paid by vehicle owners annually.

In enforcement, the government will rely on the renewal of insurance policies as a mechanism to ensure the implementation of the tax.

The new tax strategy could prove expensive for some motorists given that the government is also gearing towards introducing toll stations on the new highways in the country.

The Kenyan DAILY POST