On February 20, 2025, Kenya’s tax appeal tribunal upheld the Kenya Revenue Authority‘s (KRA) decision to classify Ebee Mobility Kenya’s consignment of e-bikes as fully built units rather than assembled parts.
This ruling has dealt a setback to the e-mobility startup, which will now face higher taxes.
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Ebee mobility loses Kenya e-bike appeal
Ebee had argued that the bikes were imported in parts for local assembly, which would have qualified for a lower 10 per cent tax rate. However, the KRA maintained that the shipments included complete e-bikes, missing only the batteries, and should attract a 25 per cent import duty, 16 per cent VAT, and excise duty at $81 (KES10,520) per part.
As the tribunal stated, “The tribunal finds and holds that the Respondent (KRA) was justified in reclassifying the Appellant’s (Ebee Mobility) imported products from HS Code 8714.91.00 (imported parts) to HS Code 8711.60.00 (fully built imports)”.
This decision emphasises that the motor, not the battery, is the key component defining an electric bike.
“Even if the bicycle has a battery, and there is no motor to convert the electrical energy to kinetic energy to propel the bike, then the battery has no value in turning the bike into electrical,” the tribunal noted.
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Tax ruling threatens Kenya’s e-mobility assembly
The ruling could have broader implications for Kenya’s e-mobility industry, particularly for companies like BasiGo, Ampersand, and Spiro, which rely on imported parts for local assembly.
Ebee’s financial ramifications were significant but controllable. After evaluation, KRA’s original tax demand of $53,302 was lowered to $20,857.
The ruling’s interpretation of local assembly standards could alter manufacturing incentives for companies.
Kenya’s e-mobility ambitions face new challenges. The verdict clarifies assembly and importing, although it may threaten business strategies.
This decision represents a turning point in striking a balance between tax policy and industrial development goals in Kenya’s expanding electric mobility sector.