The government has moved to promote the uptake of electric and cooking gas-powered vehicles in the country through various tax incentives included in the 2022/2023 Supplementary Budget.
In the budget statement released by Treasury, the government resolved to reduce the exercise duty on electric vehicles to 10 per cent.
Exercise duty is a tax the government imposes for producing, licensing and selling goods.
On the other hand, the income duty imposed on green energy vehicles was reduced from 35 per cent to 25 per cent.
"To promote the uptake of electric vehicles, the National Treasury reduced the excise duty on 100 per cent of electric motor vehicles to 10 per cent. The government has also reduced Value Added Tax (VAT) on LPG to 89 per cent.
"This makes fuel for LPG-powered motor vehicles affordable. In addition, import duty for 100 per cent electric motor vehicles is at the rate of 25 per cent as opposed to 35 per cent imposed in other categories of motor vehicles," read the supplementary budget in part.
The government explained that the move was informed by earlier recommendations made in the previous administration in recognition of the advancement of the electric vehicle sector in the country.
On the other hand, the government promised to look at the taxes imposed on the importation of spare parts following requests made by investors in the sector.
Many investors had noted electric vehicles were expensive given the various taxation imposed on the spare parts.
"In this respect, specific spare parts to electric or gas powered motor vehicles will require further analysis, in consultation with the Ministry responsible for trade and industry and sector players with a view to developing appropriate incentives for this category of vehicles," Treasury promised.
The government's move came amidst plans to develop electric charging stations across the country.
Some of the institutions set to undertake the installation of the technology include Kenya power and Kenya Electricity Generating Company PLC (KenGen).
In November 2022, KenGen indicated that it would roll out 30 charging stations for electric vehicles across the country.
Furthermore, Kenya Power set aside Ksh40 million to purchase three electric vehicles.
