Nyeri town MP Duncan Mathenge has proposed a reduction in the rate at which the proposed motor vehicle circulation tax should be levied.
Speaking on Citizen TV on Monday, Mathenge stated that he thinks the motor circulation tax should be reduced and possibly scrapped.
"We can say that this tax, we do not think it is in the better interest of Kenyans and let us do away with it in totality," he said.
"The other option is that we can say reduce it from the rate that is proposed. I am recommending a reduction from 2.5 per cent to 0.5 per cent."
The Finance Bill, 2024 has proposed to introduce a 2.5 per cent motor circulation tax capped at a maximum of Sh100,000 per annum.
According to the proposed law, insurance companies will collect the tax at the point of issuance of motor vehicle insurance cover if the Bill is passed into law.
"An insurer who fails to collect and remit motor vehicle tax shall be liable to pay a penalty equivalent to fifty per cent (50 per cent) of the uncollected tax and the actual amount of the uncollected tax," the proposed law states.
This means car owners will continue paying the government 2.5 per cent of their vehicle’s value annually from their income.