Wednesday, June 19, 2024 - President William Ruto has lost a whopping Sh58 billion; the money he had planned to illegally collect from Kenyans in the name of motor vehicle circulation tax.
According to National Assembly
Finance Chair Kimani Kuria, Ruto's government was planning on generating Ksh58
billion through the introduction of the tax.
The Motor Vehicle Tax was
proposed by Ruto's administration as a strategy to raise revenue for the Ksh3.9
trillion budget. Motorists were to pay 2.5 per cent of the vehicle’s
value.
"The motor vehicle
circulation tax as proposed is going to raise Ksh58.02 billion," the MP
stated during an interview.
Notably, Ksh58 billion was the
targeted collection when the government still had the maximum cap of Ksh100,
000.
Therefore, this figure would
have risen significantly following proposals to remove the Ksh100,000 cap.
This move would have seen
Kenyans who own expensive vehicles pay more.
For instance, Kenyans driving a
vehicle worth Ksh10 million were to pay Ksh250,000 per year after the removal
of the cap.
However, Kenyans rejected the
tax and forced Ruto and his government to drop it among other punitive taxes.
Apart from the public uproar,
the proposed tax would have raised several legal issues. This is because the
tax was being levied on assets and not income.
"The proposal to cap the
levy at Ksh100,000 makes the tax discriminatory and non-progressive," the
finance chair noted in his report to parliament.
"The proposal will have
adverse effects on the insurance-taking behaviour of motor vehicle owners and
further lead to negative effects on the insurance sector.”
On the other hand, there were
also concerns that the government was imposing a tax on tax given that the
value of a vehicle is determined inclusive of the import duty among others.
The Kenyan DAILY POST
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