Lawmakers clash over motor vehicle tax in new Finance Bill 2024

Mbeere North MP Geoffrey Ruku. [Spice FM]

The proposed Finance Bill 2024 has caused divisions among lawmakers as public participation commences.

Mbeere North MP Geoffrey Ruku, has reiterated his support for the contentious Motor Vehicle Circulation Tax included in the Bill, describing it as a “step in the right direction.”

He says the tax will enable rural areas to improve their infrastructure, which is often lacking compared to urban regions.

“In my constituency, over 80 per cent of the roads are not tarmacked. When will Mbeere North have 70 per cent of tarmac road?” he questioned during an interview on Spice FM on Tuesday, May 28. 

He further explains that the current road development funds of Sh42 million per constituency are insufficient, necessitating the collection of the motor vehicle tax to bridge the gap.

The Bill has sparked debate among legislators, with some opposing the tax proposals put forth by the National Treasury.

Githunguri MP, Gathoni Wamuchomba, has rejected several aspects of the Bill, including the motor vehicle tax, which she terms “punitive and retrogressive.”

“The government should not tax any assets; it should tax income,” she says in a civic education video posted on her social media platforms on Monday, May 27.

Wamuchomba notes such a tax should only apply to assets that generate income, such as commercial vehicles.

National Assembly’s Finance and National Planning Committee Chairperson has initiated public participation sessions to gather citizens’ opinions on the proposed tax measures.

Representatives from the Kenya Association of Manufacturers (KAM), Institute of Economic Affairs (IEA), Institute of Public Finance (IPF), Institute of Certified Public Accountants of Kenya (ICPAK) and Deloitte & Touche are scheduled to present on the first day of the hearings today.