Motorists to Protest Finance Bill Taxes in Nairobi CBD

May 24, 2024

The Motorists Association of Kenya has announced a protest in Nairobi CBD on Friday, May 24.

In a letter to the Nairobi Central Police Station, the association gave notice of peaceful demos in opposition to the proposed taxes in the Finance Bill 2024.

The motorists will specifically protest the introduction of a Motor Vehicle Tax, set at 2.5% of a vehicle’s market value if the Bill passes unchanged.

The letter detailed that about 100 people would participate in the protest along Aga Khan Walk between Kenya Re and Kenya Power from 10:00 am to 11:00 am.

We hereby notify you of a peaceful protest against the 2.5% proposed motor vehicle tax, effective from July 1, 2024, if approved and enacted. The protest will take place on Friday, May 24, 2024, along Aga Khan Walk between Kenya Re and Kenya Power from 10:00 am to 11:00 am. We’ll have around 100 people. It will be a peaceful protest with decorum,” the statement read.

Should the contentious Bill be passed without amendments, Kenyan motorists will need to pay the motor vehicle circulation tax when obtaining insurance coverage.

The tax will be based on the vehicle’s value, determined by factors such as make, model, engine capacity, and year of manufacture. For example, a person buying a car worth Kes.1 million will pay Kes.50,000 annually to the government.

Insurers who fail to collect and remit the tax will face a penalty of fifty percent of the uncollected tax, in addition to paying the actual amount of the uncollected tax.

Earlier, the Association of Kenya Insurers (AKI) stated that the tax would increase the cost of motor insurance, with comprehensive cover premiums already at 5 percent. The additional 2.5 percent taxation will raise the premium to 7.5 percent, potentially leading motorists to opt for third-party insurance to cope with rising living costs.

“With motor vehicle insurance being compulsory in Kenya, we anticipate a major shift towards third-party motor insurance if this tax is implemented. Consequently, motorists will face higher risks, as they will only be covered for third-party liabilities, leaving their vehicles unprotected in accidents,” AKI executive director Tom Gichuhi stated.

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