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Govt urged to exempt buses from taxes

30 September 2013, 14:46

Nairobi - A lobby group has urged the government to cease charging taxes on bus purchase arguing this would ease traffic congestion in Nairobi.

The Matatu Welfare Association said eliminating the tax would encourage more people to purchase the vehicles.

This would subsequently eventually phase out the 14-seater matatus which have been accused of causing traffic congestion in the capital city.

“The government ought to make the acquisition of buses cheaper in order to fast track upgrading from smaller to high capacity vehicles,” said Matatu Welfare Association Chairman, Dickson Mbugua.

Mbugua added that they were concerned that the 16 percent value added tax (VAT) would slow down the purchase of buses since the tax loaded on a new PSV chassis was extremely high.

He called on the government to repeal the section that included the PSV vehicles in the VAT tax bracket.

The association’s call comes at a time when research shows that millions of shillings are lost through the traffic jams that are common in the capital city.

The government had zero-rated taxation on high capacity vehicles, a move that had worked well previously.

Traffic congestion is a major issue in many large African cities, with commuters spending hours a day on clogged thoroughfares.

Nairobi is home to some of the worst traffic not only on the continent.

- CAJ News


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