Car importers fault KRA's new car valuation, says will cripple the industry

A Car Carrier, "MV Morning Calm" at the port of Mombasa. Traders are struggling to make sales because of reduced buyer purchasing power. [FILE] The Car Importers Association of Kenya (CIAK) has rejected the proposed revision of the retail selling prices of imported used motor vehicles by the government. The Automotive sector representative has said that the revision sets ground for unjustified and steep increase in showroom prices of motor vehicles. This follows the plans by the Kenya Revenue Authority to revise the Current Retail Selling Price (CRSP) list of new motor vehicles. This revision will be the first update since 2019 and is used to determine how imported cars are taxed. The revised prices of imported used motor vehicles according to revenue authority were to take effect on July 1st, 2025. Through a public notice dated May 30, 2025, the revenue authority claimed that their decision followed a stakeholder engagement and a review of the outdated 2019 CRSP database which had excluded most new car models. Dealers warn that this revision will see price hikes at the retail level as it is expected to raise tax burden for dealers and users. The Car Importers Association of Kenya has however taken issue with the lack of stakeholder consensus. In a statement seen by the newsroom, the umbrella body said that despite holding consultative meetings on the said revision, the final list shared by the revenue authority has disregarded critical inputs from stakeholders. "Especially regarding valuation methodology and market trends". Further, it has accused the authority of rushed implementation that risks undermining fair administrative practice. According to the importers, the proposed import valuation could see a 70 per cent stock reduction among SMEs, Job losses in the value chain, and the Authority itself risk losing revenues from motor vehicle imports. To this, they have requested for the suspension of the proposed revision, a 90-day period for review, and joint technical committee with the car importers association to rationalize the CRSP values based on market data. Car Importers Association of Kenya has also stated that the matter regarding the implementation of the new valuation system is a matter in court, hence the announcement that new CRSP will take effect on July 1st, is unbecoming. Based on the 2019 CRSP, a Toyota Passo 990cc costs up to Sh1.4 million, and given the proposed new valuation, it may see an 87 per cent increase, going for Sh2.6 million. The Price of a Nissan Vanette will more than double to Sh4.67 million, up from Sh2.3 million. A Toyota Probox may see a 91 per cent increase from Sh1.7 million if the proposed amendment sails through. Pointing out that most popular car models are missing from the updated list, hence they fear that importers may be subjected to inconsistent landing costs. The association has said the revenue authority risks crippling the motor vehicle industry and has faulted them for increasing duties. "All these levies and duties are overburdening Kenyans who are major customers of used cars," Car Importers Association of Kenya. In response, the Kenya Revenue Authority has said that it adopted the World Trade Organization (WTO) Agreement on Customs Valuation, in consultation with stakeholders, and agreed to use the CRSP method to address challenges encountered in valuing used motor vehicles. "This approach aims to standardize values and ensure predictability and transparency within the industry," KRA. The CRSP is reviewed periodically to reflect changes in the economic environment, including exchange rate fluctuations, inflation, the introduction of newer vehicle models, and changes in tax rates. According to the Revenue Authority, the import duty rate has increased from 25 per cent in 2019 to 35 per cent in 2025. "Furthermore, many new and more advanced vehicle models have entered the market, which are not included in the 2019 CRSP". Contrary to the claims of the Car Importers regarding stakeholder engagement, Kenya revenue authority maintains that a working team was constituted comprising representatives from Car Importers Association of Kenya to deliberate on the list and valuation method. Afterwards, the authority says, A validation meeting was held in May 2025, where the draft list was reviewed and further input from stakeholders was received and incorporated. "The new CRSP is, therefore, a product of a comprehensive consultative process in which stakeholder input was considered," KRA said in a statement to the newsroom. In addition, the revenue authority defends that the new list has more than 5200 unique models as compared to the 2019 list, which had about 3000 models. Despite this expansion, some models are still missing from the 2025 list. The authority has said, this is because they were not found in either the Japanese Yearbooks or Goo-net. "However, once the technical team agrees on additional data sources, the list will be continuously updated and made available to the public," Kenya Revenue Authority through the Commissioner, Customs and Border Control.

Car importers fault KRA's new car valuation, says will cripple the industry

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Car importers fault KRA's new car valuation, says will cripple the industry

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