Kenya mulls tax measures for recharging electric vehicles

Kenya mulls tax measures for recharging electric vehicles on growing uptake

Kenya wants to develop a policy to guide tax measures for recharging electric vehicles and has already invited an audit into the impact of e-mobility on the fuel levy.

The Kenya Roads Board Fund (KRBF), mainly financed through the proceeds of a Road Maintenance Levy Fund (RMLF) is used for roads maintenance across the country.

Currently, Ksh.18 of every litre of petrol and diesel purchased goes to road maintenance levy.

The KRBF is distributed among the road agencies charged with the maintenance including Kenya National Highway Authority (KeNHA), Kenya Urban Roads Authority (Kura), Kenya Rural Roads Authority (KeRRA), and Kenya Wildlife Services (KWS), and the county governments.

And with a little nascent of e-mobility in the country, Kenya Roads Board (KRB) has invited an audit on the impact the shift would have on RMLF collections.

Rashid Mohamed, KRB Director-General says consultants would undertake a study on the economic impact of e-mobility on the sustainability of the RMLF.

Electric Vehicles Policy

Kenya is also developing a policy to guide the licensing of electric vehicles.

The State Department for Transport is already in search of a consultant to help deal with electric vehicle uptake barriers such as high purchase cost, limited driving range, inconvenience of recharging and limited model choices.

“The consultancy will assess and propose how the statutory environment can be structured to support electric modes of transport and prepare a national electric mobility policy for Kenya,” said the department in a tender document in December last year.

The consultant will also assess the capacity of local dealers, assemblers and Small and Medium Enterprises (SMEs) including the jua kali sector to repair and maintain electric vehicles and propose strategies to fill the gaps.

The Kenya National Energy Efficiency and Conservation Strategy developed last year set a target of the share of electric vehicles imported annually to reach five percent by 2025.

Only approximately 350 of Kenya’s 2.2 million cars are electric, but the country is looking to increase this number.

To encourage e-mobility, Kenya reduced the import duty for fully electric vehicles in 2019.

And in 2020, the country released a strategy to increase the adoption of EVs while reducing the amount it spends on importing petroleum and cleaning the environment.

Measures in the strategy include having public buildings and new estates incorporate charging stations.

Electric Vehicles Fiancing

Despite the strides, little has been achieved two years down the line with some of car financing companies staying away from electric vehicles due to a lack of enough charging stations.

According to Autochek Country Manager Bilhah Muriithi, the company is apprehensive to finance electric cars with zero units so far since its launch in Kenya in October 2021.

“There is still not enough demand for those assets,” said Muriithi adding that “there are not enough charging points in Kenya.”

Uptake of electric mobility has been prioritised and included in the National Climate Change Action Plan 2018-22 as a mitigation action that can provide ease of mobility with minimal destruction to the environment.

Opibus, a Swedish-Kenyan firm is creating and assembling powered electric vehicles and motorcycles units locally tailored for the African continent.

BasiGo, a local start-up introduced a Ksh.5 million passenger electric bus in March this year in anticipation of increased demand for environmentally friendly transport.

The 25-seater bus, which is designed by the world’s largest manufacturer of electric buses BYD Automotive, has a 250-kilometre range with a recharging period of less than four hours.

Kenya has already installed a capacity of 2991 MW and an off-peak load of 1200 MW to avail enough power to support the entire e-mobility ecosystem comprising powering charging stations for domestic and business use.

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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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