Kenya plans to impose a 16% value-added tax (VAT) on electric vehicles, lithium-ion batteries and electric bicycles, a policy shift that could raise costs for consumers and slow the growth of one of Africa’s most active clean transport markets.
The proposal, included in the Finance Bill 2026, would remove tax incentives that have helped electric mobility companies expand rapidly across East Africa in recent years.
The move is expected to affect companies such as BasiGo, Roam and Ampersand, which have invested heavily in electric buses, motorcycles and battery-swapping infrastructure in Kenya and neighbouring countries.
Industry players say the proposed VAT could significantly increase operating costs in a sector that still relies heavily on imported vehicles, batteries and charging equipment.
A 2025 industry study found that “all or almost all inputs for EVs are imported,” exposing operators to exchange-rate volatility, shipping costs and import-related taxes.
