Nairobi – The East Africa Community (EAC) Council of Ministers has agreed to extend the 15 per cent tax waiver on imported motorcycle spare parts to June 2016. Harrison Mwakyembe, chairman of the EAC Council of Ministers, said extension of a special tax waiver on imported parts is to support the sector. An earlier tax schedule by the council indicated imported motorcycle parts - commonly known as completely knock down kits (CKD) - would attract a 15 per cent tax starting July 1, 2014. The implementation of the tax introduced in 2013 was, however, shelved for a year following intense lobbying by manufacturers of motorcycles. If implemented, the unpopular tax move would see motorbike manufacturing firms pay the full 25 per cent tax to import spare parts, which is the equivalent of duty paid for finished motorcycles. Motorcycles are a popular mode of transport in urban areas in the region for their ability to beat lengthy delays caused by incessant traffic jams. They are also used heavily in rural areas where they offer more flexibility and wider reach as most areas suffer from poor road networks. The popularity of motorbikes has drawn the interest of investors seeking self-employment, with a large number preferring cheaper Asian models.
