Today effectively marks the beginning of the most unpopular and most illogical taxation decision ever made by any government in the history of Kenya. The cost of importing a car shoots up by about 200,00 from today. This is in addition to the extra high existing taxes and policies that make cars too expensive in Kenya.
As I keep saying, the IMF guys in policy-making positions in Kenya ought to be checked and told off –otherwise, they will mess President Uhuru’s voter base. In my first year of studying economics, I was taught that the moment the government starts over-taxing, the masses react by getting alternatives.
See also: Prices of water, soda, beer and cars go up
Making cars too expensive will obviously have some serious economic repercussions. The transport sector is one of the key pillars of the economy. It makes absolutely zero economic and political sense if Treasury cabinet Secretary Henry Rotich makes cars two or three times more expensive in Kenya compared to Uganda. This is because the East African Community (EAC) has set up mechanisms that make it easier to have Kenyans owning cars registered in Uganda and Tanzania.
It reminds me of 2008, when we came together to start the business of getting fresh fish from Lake Turkana, and taking it to DRC. When we started looking for lorries, we discovered that the cost of a very effective FUSO lorry in Uganda was exactly the same as a Pick-up in Kenya. We settled for the FUSO lorry and it served us well in our trips from Kalokol in Turkana to Eastern DRC.
Right now a Rav 4 with the latest number plate in Uganda goes for about 350,000 Kenya Shillings and a Pajero for Ksh450,000. A good Toyota Premio goes for about 400,00. So, why would a Kenyan pay three times the cost, if the EAC makes it easier to own a Ugandan registered car in Kenya. Right now 70% of lorries bringing fresh produce from Uganda and TZ are owned by Kenyans and have UG and TZ registration.
Bottomline is, Kenyans must think smart.
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