The guys that can be considered as unlucky Kenyans since the Government started experiencing revenue issues in the second quarter of 2015/2016 Financial year are Kenyans who own cars. First, it started when in October 28, 2015 Members of Parliament voted to impose an Excise Duty tax of shs 200,000 for importing more than three year old cars. A car that is three year old is now attracting an additional shs 150,000 on excise duty up from a previous average of shs 45,000. Since Kenyans import an average of 7,000 cars every month, the new excise duty was supposed to give the Government an additional shs 168 million each year, but according to reports generated by the end of January 2016, the implementation of the excise duty only worked to reduce the car imports, something that happened for the first time in four years.
After the implementation of the excise duty on imported second hand cars failed to bear much fruit, motorists again became the unlucky Kenyans when the government through NTSA issued a notice to the effect that car owners with vehicles older than four years (from the date of manufacture) must have their vehicles undergo inspection. According to the new notice, those who own private vehicles with an engine capacity of 3,000cc and below will pay shs 2,600 for the inspections, while those with Engine capacity above 3,000cc will part with shs 3,900. The inspections are not limited to motor vehicles, motorcyclists will also have to part with shs 1,300 to have their boda bodas inspected.
Finally, today the Government announced that all those unlucky Kenyans, including those who own motorcycles, must acquire new number plates within the next few months. This is the biggest move by the government as it targets every single motor vehicle owner, including the motorcyclists. According to the new memo, every car, lorry, bus or pickup owner will part with shs 3,700 for the new generation number plates, whereas the motorcyclists will have to part with shs 1,500 for the same number plates. The government targets to raise some shs 6.2 billion by the end of this exercise from the approximate 2.2 million vehicles and motorcycles owned by the unlucky Kenyans.
Other than the excise duty that is a direct tax, the other two revenue generation streams seem to be well intended. For starters, a significant number of accidents and traffic menace in Kenya are caused by road unworthy vehicles. Most car owners also always ignore the need to take their vehicles for general maintenance whenever the cars are due for maintenance. To force the Kenyans to take their vehicles for annual or biennial checks will ensure that by and large the vehicles that ply our roads are roadworthy.
The new generation number plates that the motorists will be required to buy in the next few months come with a microchip that can be read remotely either by Police Officers or by RFID readers embedded on traffic lights. The RFID microchips will contain details of the cars and car owners, and this technology may help the government implement ticket fines for minor offences like overlapping or speeding and this may help in reducing the rampart corruption that has affected the traffic police force for decades.
Although vehicle inspection and the implementation of the new digital number plates are well intended, the motorists will still feel as though they are unlucky Kenyans since the Government seem to be implementing measures targeting their pockets back to back. Already the car dealers are feeling the heat of not being able to sell vehicles at a growth path thanks to the 200% increase in excise duty, and car owners will have to part with close to shs 10,000 this year alone on additional charges for vehicle inspection and purchase of new number plates.