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NTSA issues high tax threat to motorbike lobby

The National Transport and Safety Authority (NTSA) has threatened to push for higher taxation of motorcycles if players in the industry don’t help in curbing accidents.

The threat is specifically targeted at assemblers, through their newly formed umbrella body the Motorcycle Assemblies Association of Kenya (MAAK).

The firms currently pay 10 per cent duty on imports of completely knocked down (CKD) parts, which are used to assemble motorcycles locally.

Imports of fully built motorcycles are taxed at a rate of 25 per cent, giving the assemblers a significant competitive edge in terms of pricing.

The taxman levies an additional 16 per cent value added tax (VAT) on all motorcycles. It is the lower import tax on CKD, introduced eight years ago, that the assemblers risk losing, according to the NTSA threats.

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“We will push the government to re-introduce the punitive tax on the sector if the involved bodies do not work together to educate operators on road safety and discipline,” said Francis Meja, the NTSA director-general.

While speaking at the official launch of MAAK yesterday, he asked the association to work with registered boda boda organisations to help educate operators on new road safety regulations.

The rules to abide by include wearing safety gear, riders having PSV insurance, a valid driving license and a minimum third party insurance as stipulated in the gazette notice published on in February.

Those who fail to adhere to these regulations risk a fine not exceeding Sh20,000 or imprisonment for a term not exceeding six months or both.

The lower taxation of CKD parts has seen the industry experience a steady growth in the registration of motorcycles from 16,293 in 2007 to 140,216 in 2011.

Motorcyclists have over the past five years recorded a growing number of fatalities and were named the third largest killer on the roads by the 2015 Economic Survey.

These deaths were attributed to a poor motorcycle riding culture by players in the country.

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