Locally assembled cars will attract lower taxes if a presidential directive is implemented.
This comes with the launch of the first locally assembled Mahindra vehicles, the Mahindra Scorpio Single and Double cabin pick-ups in Nairobi.
The vehicles were assembled at the Associated Vehicle Assembly (AVA Kenya) plant in Mombasa. AVA is a wholly-owned subsidiary of Simba Corporation Limited.
The National Treasury and the Kenya Revenue Authority (KRA) are to immediately institute actions aimed at reducing taxes for vehicles that are fully assembled locally following a directive by President Uhuru Kenyatta.
Kenyatta asked motor vehicle assemblers, in consultation with the National Treasury and the Ministry of Industry, to work out a mutually agreeable framework that will ensure the benefits accruing from the tax incentives are passed on to the consumer.
Speaking during the launch of the two vehicle models, Kenyatta said Mahindra Motors has joined the list of globally renowned automotive brands that have chosen Kenya as their home.
Other global automobile brands that are locally assembled in the country include Toyota, Peugeot and Volkswagen.
The President emphasized that his administration has prioritized the local assembly of motor vehicles as a means of creating jobs and enhancing technology transfer.
In keeping with the “Buy Kenya, Build Kenya” campaign, the President said the government is promoting market access through preferential procurement of locally assembled vehicles.
“My Government is committed to working together with all players to enhance the capacity of the motor industry. I am, in particular, pleased to note the progress we are making in the motor vehicle sector,” the President said.
He congratulated Simba Corporation for the refurbishment of the Mombasa-based AVA to a level of the globally endorsed centre of excellence with a capacity to assemble and supply to the East African region.
“This is important to us, as it will create more opportunities for our people through employment, facilitate the growth of associated downstream industries and encourage even more investments, not only in this sector but in others as well,” the President said.
AVA currently assembles vehicles for 10 vehicle manufacturers and is certified and endorsed by 20 global manufacturers.
President Kenyatta challenged other sector players to take advantage of the refurbished AVA facility, which is currently producing 10,000 units annually, to increase their production.
He encouraged the private sector, not only in the manufacturing sector but across the entire economy, to tap into the ingenuity of young Kenyans and join in conceptualizing and delivering transformative innovations that will help boost the economy.