Car importers warn of industry collapse over new KRA vehicle tax valuations

The Kenya Revenue Authority’s (KRA) new vehicle valuation list set to begin July 1 has drawn strong criticism from the Car Importers Association of Kenya (CIAK), which says it could devastate the used car industry and lead to job losses.

CIAK claims the revised Current Retail Selling Price (CRSP) list inflates vehicle values unjustifiably and was implemented without genuine consultation with stakeholders.

Peter Otieno, CIAK national chairman, said in a statement on June 4, “The final list disregarded critical input from stakeholders. It’s like the consultations were just for show.”

The updated list shows massive price hikes, such as the Toyota Passo 990cc jumping 87 percent to Sh2.6 million, the Nissan Vanette doubling to Sh4.6 million, and the Toyota Probox rising 91 percent to over Sh3.3 million.

Prices for newer vehicles like the Aiways U5 electric SUV and Audi models also reached high levels, with the Audi 3.0 TFSI Quattro S Line valued above Sh16.2 million.

Otieno explained, “These prices are out of touch with our market. Even second-hand versions will attract duties most dealers and customers can’t afford.”

The list also excludes many commonly imported models like the Toyota Hilux and Subaru Impreza G4, leaving importers uncertain about duty costs.

Despite KRA’s announcement that the list followed extensive consultations, CIAK rejected this, saying, “You denied the leaked list was yours, but now you've published it exactly as it was. So why pretend to engage?”

The group also highlighted that KRA ignored their proposed depreciation structure, which would allow duties to reduce gradually with vehicle age, up to 85% depreciation for cars over seven years old.

The association warned the list could reduce the available vehicle stock for small and medium importers by 70 percent, resulting in job losses at clearing yards, garages, and showrooms.

They also pointed out several tax hikes since 2019, including excise duty rising to 35% and import duty to 35%.

Otieno stated, “You cannot kill the industry to raise revenue. In the end, you’ll get neither.”

CIAK demands the new valuation list be suspended immediately, a 90-day transition be allowed, and a joint technical team formed to review the values.

The group further accused KRA of breaching a 2018 High Court order and ignoring unresolved tax refund claims by publishing the list without clearance.