Motor Vehicle Tax – Is it our job to collect it?

Many of you will have read or heard about the new Motor tax being implemented by the Government from 2025.
Car tax is not a new thing in the World. Currently, the tax in the UK can range from a few pounds to as much as £2,745 if your emissions are excessive! As such, we may have to accept this tax, albeit it is on the back of some pretty unpleasant cost of living expenses. We are sure, if it goes ahead, the money will be used in a sensible way to repair roads, improve road infrastructure, and create traffic easing systems 😊

What we do have an issue with is, why on earth does the Government think it is right and fair to ask the insurance industry to do their work for them. It is a tax…simple…not an insurance premium tax and it has absolutely no bearing on insurance at all. It is the KRA’s responsibility, with all their competent and professional staff, to collect the motor tax, just like they collect every other tax, so get your team on the case please.

The proposed new tax bill states that if an insurer does not collect the tax, they are liable to a fine and penalties. Does this apply to a broker as well? We are well practised at collecting our clients’ premiums, and we remit in good time to our partner insurers, and we are rewarded by collecting a commission for our efforts. What if we have a bad payer? What if the client wants to pay by instalments and the insurer has agreed? What if the annual valuation of the vehicle takes longer than expected and what if, when it is valued, it takes the vehicle owner into a different tax bracket? Will the vehicle owner get that back directly from the KRA or will the KRA pay the insurer and then the insurer reimburses the broker, who then, in turn, reimburses the customer? Imagine the administrative nightmare of all of this! And then the Government thinks it’s OK for the insurance industry to do their work for them without any compensation.

Sorry guys, but we don’t believe it is our responsibility. The KRA needs to collect this tax in the same way they collect all the other taxes we pay.

If you have any questions on the above, please do get in touch: Email:talk2us@jwseagon.com or Tel: + 254 (0) 709 455 000.