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Kenya plans to extend the standard 16% valued added tax (VAT) to electric vehicles (EVs), lithium-ion batteries, and electric bicycles, reversing tax breaks that supported the country’s electric mobility industry.
The proposal, contained in the Finance Bill 2026, could increase the cost of imported batteries, electric buses, and related components in a market where startups like BasiGo, Roam, and Ampersand are expanding operations across public transport and battery-swapping infrastructure.
The proposed VAT changes come as electric mobility firms continue to rely heavily on imported batteries, vehicles, and charging equipment. A 2025 industry study found that “all or almost all inputs for EVs are imported,” exposing the sector to foreign exchange costs, shipping charges, and import taxes.
Kenya has emerged as one of East Africa’s most active electric mobility markets in recent years, partly helped by tax incentives that lower the cost of adopting electric vehicles and batteries.
