Government mulls the introduction of a traffic congestion tax in Kenya

Motorists in major cities in Kenya may soon have to pay traffic congestion charges if the government follows through on a draft policy targeting environmental protection and easing traffic congestion in the cities. The National Treasury issued a policy document outlining plans to use taxation to reduce traffic congestion in major cities and slow global warming.

Kenya is seeking the introduction of a congestion charge through the Draft National Green Fiscal Incentives Policy Framework, a fee to be paid by all motorists driving in heavy traffic zones, including all major towns.

“The government will explore the development of a congestion charging scheme in cities as a source of revenue for greening the sector. This will help to reduce emissions from the sector, as well as congestion and inefficiency in the public transportation system. This will be supplemented by efforts to ensure that the lead implementors and the general public understand it,” the document states in part.

It does not, however, specify the proposed amount that motorists will pay, the types of vehicles charged, or whether the tax will be combined with other taxes such as the fuel levy or parking fees. The government intends to generate revenue while discouraging motorists from purchasing high-emission vehicles to avoid paying the tax.

According to official figures, Kenya has 4.4 million vehicles, the vast majority of which are powered by internal combustion engines. The State sees carbon taxes as catalysts to the transition to zero-emission vehicles.

Kenya has seen an increase in the number of vehicles – primarily those powered by gasoline or diesel- and plans to shift the burden of pollution to those responsible. The transport sector in Kenya directly accounts for approximately 11% of total GHG emissions, with sector growth expected to push emissions to about 15% by 2030.

Available data shows the sector is the largest consumer of liquid fossil fuels in Kenya, accounting for 81% (67% by road transport and rail and 13% by aviation) of total final consumption of oil products. Vehicles emit Carbon after burning fossil fuels. The tax will encourage motorists to purchase electric and hybrid vehicles while also achieving the overall environmental goal through flexible and low-cost methods for motorists.

The policy document notes that the “government will provide incentives for import, manufacture and assembly of electric and hybrid motor vehicles, electric motorcycles and their spare parts. This will be required to aid in the transition to low-emission and clean transportation systems.”

According to the World Bank, 40 countries and more than 20 cities, states, and provinces have already implemented carbon pricing mechanisms, with more on the way. The existing carbon pricing schemes cover roughly half of their emissions, about 13% of annual global greenhouse gas emissions.

The Draft National Green Fiscal Incentives Policy Framework, based on Kenya’s 2017 Emission Baseline, identifies transport as the fourth largest carbon emitter after energy (electricity generation), agriculture, and forestry. The Climate Change Act (No. 11 of 2016) also provides a framework for mainstreaming climate change across sectors, and guides climate change action in Kenya. The Act requires the State to develop a five-year National Climate Change Action Plan (NCCAP) that addresses all sectors of the economy and includes mechanisms for incorporating climate change into all sectors.

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