The Ministry of Energy on Thursday, September 14, exempted electric vehicles from Value Added Tax (VAT) in a move to increase their uptake in the country.
Speaking during a meeting with officials from the Energy Petroleum and Regulatory Authority, Energy CS Davis Chirchir announced other tax incentives for electric vehicles in the country.
“The government has rolled out fiscal incentives such as reducing excise duty from 20 per cent to 10 per cent for fully electric vehicles. We have approved a special e-mobility tariff and exempted electric vehicles from Value Added Tax (VAT).
Locally assembled E-motorcycles are exempted from excise duty and affordability of the electric vehicle batteries has been prioritized through VAT and Import duty exemptions,” Chirchir stated.
According to the CS, the new incentives are aimed at helping the country transition to the use of renewable energy and conserve the environment.
“E-mobility will contribute significantly to our goal of achieving a 100 per cent transition to renewable energy by 2030. EPRA data shows that as of July 2023, 91 per cent of the total energy mix in Kenya is from renewable energy resources. Electric vehicles are poised to add to this demand, propelling us further into a green energy future,” he stated.
EPRA on the other side committed to supporting the transition to green mobility by laying down regulatory frameworks that aim to build confidence in the shift to electric vehicles.
President William Ruto had earlier vowed to support the sector to promote the uptake of electric vehicles in the country. During the Africa Climate Summit, he also used a full electric convoy driving from the State House to the Kenyatta International Convention Center (KICC).
The new initiatives are also touted to help Kenyans deal with the high cost of fuel in the country. According to EPRA’s latest review, fuel prices crossed Ksh200 a liter.
EPRA revised the prices upwards as follows; Super Petrol by Ksh16.96, Diesel by Ksh21.32 and Kerosene by Ksh33.13. Following the increase, Super Petrol would retail at Ksh211.64, Diesel at Ksh201, and Kerosene at Ksh202.13 per liter in Nairobi.
