Government to lower taxes on locally assembled vehicles

President Uhuru Kenyatta has directed the National Treasury and the Kenya Revenue Authority to immediately institute measures aimed at reducing taxes on locally assembled vehicles.

Speaking during the launch of Mahindra’s locally assembled double cabin pick-up at State House, Nairobi on Monday, President Kenyatta assured Kenyans that his administration was keen to boost the contribution of vehicle assembly to the country’s overall manufacturing sector with a view to creating more jobs in the manufacturing sector.

President Kenyatta said, “To make locally assembled vehicles more affordable and available for Kenyans, I have directed the National Treasury and the Ministry of Industrialization, Trade and Enterprise Development to hold discussions with financial institutions to create special products for locally assembled vehicles.”

The Head of State challenged other players in the country’s automobile industry to take advantage of the opportunity accorded through the refurbished Associated Vehicle Assemblers’ facility in Mombasa. The plant currently produces 10,000 units, accounting for only a third of its production capacity.

The President reiterated his call on all state entities to buy and use locally assembled vehicles and spare parts.

Indian vehicle manufacturer, Mahindra has already announced plans to make Kenya its African assembly hub as it aims to increase market share in both commercial and passenger segments.

Mahindra’s Chief of International Operations, Arvind Mathew said that Kenya is a key platform in the company’s plan to expand in Africa as the company targets both businesses and private motor vehicle buyers.

“Kenya is very key in our Africa strategy and it is informed by a research study we concluded in 2018 to understand the market need and tailor products that offer far beyond expectations,” Mr. Mathew said at the Mahindra headquarters in Mumbai last week.

The launch of Mahindra’s locally assembled vehicle comes nearly a year after President Kenyatta and French President Emmanuel Macron unveiled the Peugeot 3008, one of the models locally assembled in Kenya by French vehicle manufacturer, PSA Groupe.

The 1600cc twin-turbo Sports Utility Vehicle (SUV) is assembled at the Kenya Vehicle Manufacturers (KVM) assembly plant in Thika.

The PSA Group is the second-largest car manufacturer in Europe.

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Lawrence Baraza is a prolific writer with competencies in Digital Media, Print, and Broadcast. Baraza is also a Communication Practitioner currently spearheading Digital content on Metropol TV's Digital Desk.

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