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Car prices in Kenya jump after Uhuru okays new tax for 1500cc vehicles

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Car prices in Kenya: Vehicle prices in Kenya have increased by up to Sh. 1 million following the increase of the Excise Duty and the signing into law of the Finance Act 2019 by president Uhuru Kenyatta.

Excise duty increased by up to 35 percent effective Thursday last week. “This has increased the prices of both new and used cars, trucks and buses, with taxes taking more than half of the vehicles’ retail costs. Vehicles attract an import duty of 25 percent, excise duty (now ranging from 25 percent to 35 percent) and value added tax of 16 percent, payable cumulatively and in that order. According to changes brought through the Finance Act 2019, vehicles running on petrol and with engine capacities of more than 1.5 litres now attract excise tax of 25 percent compared to the previous 20 percent,” says a report in Business Daily.

The report further says that vehicles running on diesel will now pay excise duty of 35 percent compared to the previous 30 percent that applied on models exceeding 2.5-litre engines and 20 percent on smaller cars.

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“Total taxes on diesel-powered Isuzu double-cab pick-up trucks, for instance, have jumped by more than Sh. 500, 000, according to the Japanese commercial vehicle dealer Isuzu East Africa. Used car dealers on the other hand estimate that total taxes payable on a seven-year-old Toyota V8 running on a 4.6-litre diesel engine now stand at Sh. 2.1 million compared to the previous Sh. 1.9 million, a rise of Sh. 190,711. Duties on a 1.9-litre Mercedes E200 of the same age using petrol are now at Sh. 1.1 million, having risen by Sh. 123,235 from the previous Sh. 1 million. An importer of a 1.8-litre Toyota Premio, which is seven-years old and running on petrol, will pay total taxes of Sh. 452, 338, up from Sh. 405, 385,” says the report on the new car prices in Kenya.

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