Motorcycles will cost more if the Excise Bill 2015 that proposes a Sh10,000 levy for each unit sold becomes law, dealers have said.
This they said will lock out many young Kenyans form joining the boda boda business which opened up many business opportunities when motorcycles below 250cc were exempted from tax in June 2008.
Car and General which deals in motorcycles said the introduction of the levy will lead to a price hike and reduced purchases.
“There is always a reaction to a new price. Most motorcycles are bought by consumers in the low end of the market and a Sh10,000 increase in price makes a lot of difference for them,” head of operations David Chesoni told the star on phone.
According to the proposed bill, motorcycles other than those designed as ambulances, will be charged excise duty at the rate of Sh10,000 per unit.
The enactment of the bill is also expected to reduced the number of new vehicle registration which has risen over the six years on account of high motorcycles purchases.
The Kenya National Bureau of Statistics data shows the overall number of new vehicle registration after zero rating motorcycles, jumped 42 per cent to 121,831 units in 2008 from 85,324 in 2007.
The data shows motorcycles accounted for only 16,293 of the new registered units among all classes of vehicles in 2007, which then drastically changed to 51,412 units in 2008.
Other classes of vehicles include saloons, station wagons, vans and pick-ups, mini-buses, buses, lorries, trailers, three-wheelers, and wheeled tractors.
The KNBS data shows motorcycles accounted for 111,124 units of 218,057 new vehicles registered in 2014. The motorcycles number stands at 56,302 units out of 100,959 new vehicles registered between January and May 2015.
“The motorcycles market is already suffering from high importation costs due to the weakening of the shilling against the dollar. This bill will make motorcycles unaffordable because we cannot be able to take in more costs to cushion the consumers,” said Simon Mwaniki, the general manager of Abson Motors.