NO-CLUE-PS! Treasury’s Dr Kiptoo Struggles To Explain 2.5% Motor Vehicle Tax
Dr. Chris Kiptoo, Treasury Principal Secretary, was tasked on Thursday night with providing information on the proposed 2.5% annual tax on motor vehicle value.
PS Kiptoo stumbled over his words while defending the government against stakeholder and public concerns that the motor vehicle tax imposed a double tax on owners.
PS Kiptoo stated that the decision to implement the vehicle tax was based on the administration’s goal of raising enough revenue to stabilize the country’s economy.
However, he was unable to explain why the additional tax was imposed on top of the insurance premium, which is set at 4.5% of the car’s value.
Instead, he dismissed the concern as ‘a non-issue,’ stating that Members of Parliament would review the matter later and that public opinion would be allowed on the subject.
I can understand why it's increasingly difficult even for very intelligent people like my friend @Kiptoock to explain this "motor vehicle tax or is it charge or levy?
— Stephen Mutoro (@smutoro) June 13, 2024
📌 The elephant is actually on valuation. As Sam Gituku puts the initial value of the car includes import duty,… pic.twitter.com/qgEpLjYUlP
“This is not the proposal of the National Treasury, the National Treasury takes into account the views that come through the budget-making process,” said Kiptoo.
“We are operating in a very tight fiscal space and we have to really make very tough decisions. Some of these tough decisions are about trying to make sure that we live within our means. The issue of motor vehicle circulation shouldn’t be a big issue because there are many other options.”
The show’s host, Sam Gituku, was dissatisfied with the PS’s response and demanded an explanation, citing the fact that many owners of high-end vehicles worth more than Ksh.4 million would be significantly impacted.
He wanted to know how the tax would affect valuation and whether it was factored into the overall valuation.
Kiptoo stuttered in his response, claiming that valuation excludes taxes but failing to explain the link between the two.
Gituku asked him if the vehicle valuation would include taxes after a scathy explanation.
“I don’t think it has to include taxes, why must it include taxes?” The PS posed
“Because the market value of Ksh.7.5 million includes the taxes paid during vehicle importation,” Sam hit back.
“But now, this tax applies to what you own, such as property. It is not necessarily tax on tax, because if that were so, it would apply to many others that you have,” Kiptoo stated.
The PS instead stated that the issue of motor vehicle taxes was exaggerated and asked the journalist to focus on other types of taxes.
NO-CLUE-PS! Treasury’s Dr Kiptoo Struggles To Explain 2.5% Motor Vehicle Tax
