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{
    "id": 1442025,
    "url": "https://info.mzalendo.com/api/v0.1/hansard/entries/1442025/?format=api",
    "text_counter": 123,
    "type": "speech",
    "speaker_name": "Molo, UDA",
    "speaker_title": "Hon. Kuria Kimani",
    "speaker": null,
    "content": "Clause 9(12H) proposes an introduction of motor vehicle tax at the rate of 2.5 per cent of the value of the vehicle. With this Clause, the Committee notes the following: Section 3(2) of the Income Tax Act defines what constitutes an income upon which a tax is chargeable under the Act. The proposed motor tax is levied on an asset and not on income as described by the Income Tax Act. The proposal to cap the levy at Ksh100, 000 makes this tax discriminatory and non-progressive. This essentially means that those motor vehicles that have a value of Ksh4 million and below would have paid the fair tax of 2.5 per cent, but those vehicles that have a higher value of 2.5 per cent would have paid a less commensurate percentage of that motor vehicle tax. The proposal will have adverse effects on the insurance taking behaviour of motor vehicles earners and further lead to negative effects on the insurance sector. Hon. Speaker, notably also, commercial vehicles which are subject to advance tax would, therefore, amount to double taxation. We noticed concerns from the members of the public. Commercial vehicles take third party insurance. Third party insurance is a flat rate of Ksh7, 500. Therefore, if we impose 2.5 per cent on a matatu that, say, is worth Ksh4 million, it means that the motor vehicle tax on that matatu would be Ksh100, 000. Considering that most of them struggle to even raise a Ksh7, 500, that would be quite punitive and would lead to them not taking the regular insurance for their motor vehicles."
}