The government is set to exempt locally assembled passenger cars from Value Added Tax and excise taxes. This is a move that could see prices of automobiles fall by hundreds of thousands of shillings.
Cars manufactured abroad are charged an import duty of 25%, and VAT of 16 percent payable cumulatively.
“Additionally, It was proposed to exempt locally manufactured passenger motor vehicles from VAT.”
Assemblers of passenger cars such as Simba Corp (producer of Proton cars) and DT Dobie (Volkswagen) currently enjoy exemption from the 25 percent import duty.