Kenya proposes 16% VAT on electric vehicles and lithium batteries

The Kenyan government has introduced a proposal to impose a 16% value-added tax (VAT) on electric vehicles, lithium-ion batteries, and electric bicycles, as outlined in the Finance Bill 2026. This move marks a reversal of previous tax incentives that were designed to bolster the electric mobility sector in the country. If enacted, the new tax could lead to higher costs for imported batteries, electric buses, and associated components, potentially impacting local startups and the overall growth of the electric vehicle market in Kenya.

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