See the billions RUTO planned to 'steal' in the name of motor vehicle tax? No wonder Kenyans were furious

 

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.