This archive report was first published on 12 November 2019.
President Uhuru Kenyatta's signing of the Finance Act 2019 into law has led to a significant increase in car prices in Kenya, with some vehicles seeing a rise of up to Sh. 1 million.
As of last Thursday, excise duty has increased by up to 35 percent, affecting both new and used cars, trucks, and buses. The new tax structure has seen taxes take more than half of the vehicles' retail costs.
According to the Finance Act 2019, vehicles running on petrol with engine capacities of more than 1.5 litres now attract an excise tax of 25 percent, up from the previous 20 percent. Diesel-powered vehicles, on the other hand, will now pay excise duty of 35 percent, compared to the previous 30 percent for models exceeding 2.5-litre engines and 20 percent for smaller cars.
Isuzu East Africa, a Japanese commercial vehicle dealer, estimates that total taxes on diesel-powered Isuzu double-cab pick-up trucks have jumped by more than Sh. 500, 000. Used car dealers also report a significant increase in total taxes payable on various vehicles, including a seven-year-old Toyota V8 and a 1.9-litre Mercedes E200.
