The Matatu Owners Association (MOA) has vowed to strongly oppose the proposed 2.5 per cent annual tax on motor vehicles.
Addressing the press in Nairobi, the association’s President Albert Karakacha criticised the tax asserting it would place an undue burden on the industry.
Karakacha appealed to the government and Members of Parliament to reconsider the decision, emphasizing the vital role the matatu industry plays in supporting the economy.
"We want to plead with the national government through the president to relook into this proposal. We are being overtaxed yet we play a key role in supporting the hustlers," he said.
He also noted the various challenges facing the matatu industry, such as corruption, and suggested that the government should convene a stakeholder forum to devise fair and competitive tax policies.
Highlighting the existing financial pressures on vehicle owners, Karakacha pointed out the multiple taxes already imposed, including fuel, insurance, and parking fees.
He warned that the proposed tax would further stifle the industry and inevitably lead to higher costs for passengers.
"This 2.5 per cent tax is too high and when it comes to implementation, we are going to pass it to the consumer, which is the passenger," he said.
The proposed law seeks to introduce a 2.5 per cent annual tax on the value of vehicles, with the deduction set at a minimum of Sh5,000 and a maximum of Sh100,000 whichever is higher.
The deduction, called motor vehicle tax, will be paid on each vehicle at the time of issuing an insurance cover if the Bill is passed into law in the current format.
According to the Bill, the value of a motor vehicle shall be determined based on the make, model, engine capacity in cubic centimetres, and year of manufacture.
"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."
