The National Treasury has reduced excise duty on electric motor vehicles to 10 per cent to promote the uptake of the cars.
According to the Financial Year 2022/2023 Supplementary Estimates No. 1, the reduction only applies to motor vehicles that are 100 per cent electric.
“In addition, import duty for 100 per cent electric motor vehicles is at the rate of 25 per cent as opposed to 35 per cent imposed in other categories of motor vehicles,” the ministry noted.
It added that locally assembled motor vehicles are exempted from excise duty and importation of Completely Knocked Down kits is exempted from duty.
“These incentives are meant to promote assembly of motor vehicles locally and can be utilised by assembled electrical and gas-powered motor vehicles.”
The ministry noted that spare parts are not specific since they can be used by both electrical and non-electrical motor vehicles.
“In this respect, specific spare parts to electric or gas powered motor vehicles will require further analysis, in consultation with the ministry responsible for trade and industry and sector players with a view to developing appropriate incentives for this category of vehicles.”
The electric vehicle craze is yet to catch up in the Kenyan market, but the state has been making strides in introducing the technology.
Rwanda and Uganda currently lead the pack on electric vehicle development in East Africa. They have implemented a raft of policy measures including reducing electricity tariffs for electric vehicles, zero VAT on parts, exemption from import and excise duties, and rent-free land for charging stations.