Import Duty and Tax Treatment of Electric Vehicles and Components in Kenya

Kenya’s tax treatment of electric vehicles is scattered across the East African Community Common External Tariff, the Excise Duty Act, the VAT Act and successive Finance Acts, and it is narrower and more specific than the “EVs are tax free” framing that circulates in commercial commentary. Before structuring an import or a local assembly project, it is worth knowing precisely which relief is confirmed in the current statutory text, which is asserted only in secondary commentary, and which simply does not exist yet.

Import Duty on Complete Electric Vehicles

Under the EAC Common External Tariff, tariff heading 8703.80 (vehicles powered only by electric motor) is split into two lines: unassembled electric vehicles at 8703.80.10, and other, meaning built-up, electric vehicles at 8703.80.90. Unassembled EVs attract 0% import duty. Built-up EVs do not share that relief, they fall into the same tariff band as conventional built-up vehicles, and Kenya’s own stay of application raised that band from 25% to 35% with effect from 1 July 2023. Some commercial sites advertise a flat 0% import duty on all electric vehicles. We could not confirm that claim against the EAC Gazette or KRA’s own published tariff notices for complete built-up EVs, and the primary text we did locate points the other way for that category, so we would not rely on a blanket 0% claim when pricing a built-up EV import.

Excise Duty: Confirmed for Motorcycles, Unclear for Cars

The Excise Duty Act’s First Schedule carries a specific line for “100% electric powered motor vehicles” under tariff headings 8702.40.11 through 8702.40.99, which covers electric buses and vans rather than passenger cars. On the consolidated text currently published, that line names the tariff headings but does not state a percentage or shilling rate, the rate itself appears to be missing from the published schedule rather than simply hard to find. We would confirm the actual applicable rate directly with KRA before relying on it for a specific transaction. What is clearly stated is the treatment of electric motorcycles: the Act’s excise charge on motorcycles under heading 87.11 explicitly excludes “electric motorcycles” from the per-unit charge that applies to conventional motorcycles, so electric motorcycles are excise-free. We found no separate excise line at all for electric passenger cars under heading 8703, which suggests they may not carry a distinct EV excise rate and instead fall into the general vehicle excise bands that apply by engine size and type, a point worth verifying directly with KRA rather than assuming a reduced rate applies.

VAT Treatment

The Finance Act 2023 zero-rated the supply of electric buses, electric bicycles, electric motorcycles and lithium-ion or solar batteries, a position that, per tax alerts from EY and Grant Thornton, was retained through the Finance Act 2026 after National Treasury’s initial proposal to reclassify these items from zero-rated to VAT-exempt (a change that would have removed suppliers’ ability to recover input VAT) was rejected by the National Assembly’s Finance Committee. We were not able to independently verify the exact Finance Act 2026 section number against the Gazette text due to access restrictions at the time of writing, and note this relief was confirmed through reputable secondary tax commentary rather than our own direct reading of the enacted schedule. We found no zero-rating or exemption for electric passenger cars or for EV charging equipment specifically, both appear to remain standard-rated at 16%.

CKD Kits and Local Assembly

For a business assembling rather than importing built-up, the relevant relief is the same 0% Common External Tariff rate on unassembled electric vehicles described above, which puts EV assembly on the same tariff footing as conventional CKD vehicle assembly. We found no separate, EV-specific CKD excise or VAT incentive beyond that 0% duty line, and no gazetted, project-specific incentive agreement naming any of the assemblers currently establishing EV manufacturing in Kenya. Announcements of assembly investment should be treated as commercial commitments, not evidence of a bespoke tax deal, unless a specific Treasury agreement or Gazette notice is produced.

What Remains Unsettled

Three things about the tax treatment of electric vehicles in Kenya are worth flagging to anyone structuring a transaction now rather than waiting for the sector to mature. First, the missing excise rate for electric buses and vans in the published First Schedule needs direct confirmation from KRA rather than assumption. Second, we found no EV-specific carve-out from the general 8-year maximum age limit that applies to imported vehicles, so absent contrary guidance a used EV import should be assumed to face the same age restriction as any other used vehicle. Third, we found no published KRA guidance on how EV battery packs are classified or valued for customs purposes, which matters for CKD kits where the battery may be imported separately or bundled with the vehicle shell.