The finance bill 2024 has proposed introduction of 2.5% of car value vehicle tax. This tax will be deducted at the time of renewing car insurance cover. According to Naresh Leekha, the group MD of Simba Corporation’s motor division, private car owners will be the most affected by the proposed taxes.
Treasury capped the tax at KSh 5,000 minimum and KSh 100,000.
“There are two things: 2.5% of the value of the amount at which you have insured the vehicle and capping it at KSh 100,000. A high-value user who uses a truck worth KSh 6 million or KSh 7 million will pay KSh 100,000 as tax. The cost per kilometre for a truck user will be approximately KSh 1.7. It does not sound that significant.
If I drive a normal car, for example, and I buy a car at KSh 1.6 million and insure it, the cost will go up to KSh 2.5 to KSh 2.75 per kilometre. The effect on somebody who has a passenger car is more than that of commercial vehicle owners,” Leekha explained further while speaking to TUKO.
The finance bill 2024 has caused heated debate in the country as many business have lamented that it will negatively affected them and drive away business.
