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Relief for Car Manufacturers as Government scraps VAT

Post by : Ann Njambuya

Workers at the Thika Based Kenya Vehicle Manufacturers. The are assembling a Volkswagen car. Volkswagen will be a big beneficiary of the recently announced tax exemptions targeting Car manufacturers.

As the cost of living in the country soars to an all time high, The government has sought to exempt local car manufacturers from a variety of taxes. This exemption as proposed by the Treasury cabinet secretary Ukur Yatani seeks to increase investment in the industry.

If this proposed changes go through, Locally assembled cars will be very cheap as compared to imported ones. Most of the vehicles on the Kenyan roads are imported and they are usually second hand or used. This exemption from excise duty, VAT and other taxes will seek to rectify this.

An increase in investment in the local manufacturing industry will see an increase in jobs for Kenyans. More jobs for Kenyans means more money.

Also in the proposal, the government seeks to scrap the VAT on inputs on raw materials. this will benefit the suppliers of steel paint and other raw materials.

This waiver on taxes will mainly benefit the manufactures of passenger vehicles as their commercial manufactures enjoy the waiver.  This proposal have come at a very good time according to Simba corp executive Chairman Adil Popat.

Passenger Cars

While speaking to http://www.iconnews.co.ke, Mr Popat indicated that this exemption will make passenger cars very much accessible to the public.

Workers at the Thika Based Kenya Vehicle Manufacturers. The are assembling a Volkswagen car. Volkswagen will be a big beneficiary of the recently announced tax exemptions targeting Car manufacturers.
Photo//Workers at the Thika Based Kenya Vehicle Manufacturers. The are assembling a Volkswagen car. Volkswagen will be a big beneficiary of the recently announced tax exemptions targeting Car manufacturers.

This proposal are also expected to increase the number of local manufactures from the current 3. The only vehicle manufactures in Kenya are; Kenya Vehicle Manufactures, Associated Vehicle Assemblers and Isuzu.

Kenya has been trying to get into the league of machine manufacturers. this is coupled with the recent commissioning of the new Mtongwe shipyard.

Hope for Regional Domination as Mtongwe Shipyard is Complete

Whether this proposal will lead to an increased investment in the manufacturing sector is something we are going to wait for.

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