More than 14 motor vehicle models are missing from the new price list that Kenya Revenue Authority (KRA) will use to calculate taxes on used imports from July 1 amid industry uproar over steep and unpredictable duty.
The models include the Subaru Impreza G4 (1.59 litre petrol engine), Toyota Vitz (non-hybrid), Mazda Atenza Sedan GJEFP (petrol) with the two-litre engine, the Toyota Harrier 2WD ZSU60.
The models are missing in KRA's updated Current Retail Selling Price (CRSP) that was published on Friday and which will be the basis for computing taxes on used vehicles after depreciation.
The missing models could see KRA rely on their prices in the source markets to determine duty payable, a criterion that has in the past drawn industry uproar over steep taxes.
“Several popular models are missing from the proposed list, including 1.59-litre Subaru Impreza G4 (Chassis GK2), Toyota Harrier 2WD ZSU60, Mazda Atenza Sedan 2 litre GJEFP amongst many others,” Car Importers Association of Kenya (CIAK) says in a letter addressed to Commissioner of Customs and Border Control at KRA.
Dealers have in the past decried how KRA determines duty for models not included in the current CRSP that came into effect in 2020. The dealers accused the taxman of setting up used cars at higher rates than the new ones in the showrooms, leading to steep taxes.
“In view of the above, you are still going to put the industry in your usual mess that no importer knows what he or she is going to pay or the landing cost hence the left/right/centre rulings that are not consistent,” CIAK says in the letter signed by its chairman Peter Otieno.
Citing the missing models, the car importers want imposition of the new taxes on imported used motor vehicles delayed by three months.
The new CRSP was meant to capture all new models that have been released into the market but are not in the current CRSP.
Taxes for most of the small engine vehicles will more than double, in what is set to significantly hit their appeal amongst budget buyers, mostly the ride-hailing operators.
For example, a 1.2 litre Suzuki Swift (petrol) that was manufactured in 2018 will attract a duty of Sh623,503 up from the current Sh253,574 paid on a near-similar model with a 1.29-litre engine, reflecting a rise of 145.8 percent.
But big engine models such as Lexus LX570 will attract a lower duty of about Sh3.41 million from Sh4.81 marking a drop of 29 percent, while buyers of the 1.4-litre Volkswagen Tiguan (petrol) will pay Sh494,693 in duty from Sh842,717 that one pays currently for a similar model but with a larger 2-litre engine.
Duty for most of the imported second-hand cars will increase by at least Sh150,000 effective July 1, in what is set to hit an industry that is still yet to fully recover from the twin problems of the Covid-19 pandemic interruptions (2020 to 2023) and a weak shilling that triggered a significant price increase for these units.
CIAK says that it is waiting for KRA’s response before deciding the next course of action, even as the lobby pushes the KRA to delay the start of the new CRSP to September 1 this year.
