The Kenyan government is preparing to introduce a new tax in its June 2024 budget.
This time it is not commodities or imports that will be affected by the tax, but cars. The decision, according to the chairperson of the Kenyan parliamentary finance committee, Kimani Kuria, tends to tax what are called 'luxury goods' in Kenya and to promote the culture of public transport by enticing investors, including foreign ones, to participate in tenders for transport infrastructure, which may also include buses and light rail.
In reality, the financial squeeze given by the new international loans, the interest on the ten-year bond that has just been renewed, and the indications of the International Monetary Fund, strongly advise the government to introduce new taxes, and the one on cars will certainly hit the lower middle classes who cannot afford their own means of transport less hard.
Kuria explained the introduction of the new 'road tax' (in practice, our old 'vignette') in a television interview as follows.
"The tax is a hybrid between an income tax and a wealth tax. It also tries to introduce a user payment tax, like a levy. It is like saying if you don't want to pay the tax, then don't use the car. Similarly, if you don't want to use the Nairobi Expressway, you don't pay it." 

HOW THE NEW ROAD TAX WILL WORK AND HOW MUCH IT WILL COST

The tax will be imposed on all motor vehicles.
The proposed rate will be based on the value of the car, provided it is not less than Ksh 5,000 and more than Ksh 100,000. It has not yet been revealed how the value of a used car will be calculated (from the sales contract, previous depreciation calculations, statistics or expert evaluations?).
According to media reports, but this has not yet been confirmed by the government, the tax should still amount to 2.5 per cent of the car's value.
This means, for example, that for a vehicle worth 1 million shillings, a road tax of 25 thousand shillings would have to be paid, which is not a small amount.
The tax will be paid when acquiring or renewing insurance.
Insurance companies will act as collectors of the tax and forward it to the KRA.
The tax should be paid within five working days after the insurance is issued.
Cars exempt from this tax include: ambulances, vehicles owned by the national and county governments, and vehicles belonging to the Kenya Defence Force, the National Police Service and the National Intelligence Service.