The air in Kenya’s automotive sector crackles with contention as the Kenya Revenue Authority (KRA) staunchly defends its freshly unveiled price list for used motor vehicles, a list set to dictate the taxes on second-hand models entering the country from July 1, 2025.
This move has ignited a fierce debate, particularly with the Car Importers Association of Kenya (CIAK), who argue that the taxman’s approach lacks transparency and due process.
KRA, in a resolute stance, asserts that its updated Current Retail Selling Price (CRSP) genuinely mirrors the nation’s fluctuating economic landscape. This includes a careful consideration of exchange rate shifts, import duty adjustments, and excise changes.
Frank Orondo, an officer from KRA’s evaluation and tariff unit, offered a compelling defence through an affidavit, highlighting that the previous CRSP list had been in use since 2019, neglecting regular yearly updates to accommodate the influx of new vehicle models.
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Orondo emphasised that this seven-year gap between CRSP 2019 and the new CRSP 2025 naturally explains the significant differences in pricing and import duty values. He further elaborated that this revision was crucial given the prolonged period since the last update and the dynamic shifts in economic factors such as inflation, evolving new vehicle prices, and updated tax rates.
However, CIAK paints a starkly different picture. The association has dragged KRA to court, challenging the very formulation and intended implementation of these new CRSP values. This legal battle echoes a prior temporary halt of the new prices by a Kisumu court in a separate case, underscoring the deep-seated grievances within the industry.
CIAK alleges that KRA’s publication of these new prices blindsided the public, asserting that there was no prior notice, no public disclosure of the methodology used to determine the new figures, and a complete absence of public scrutiny of the draft CRSP.
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Orondo, in his defense, maintained that KRA meticulously followed due process, adhering to directives from various court cases and engaging all relevant stakeholders, including CIAK, in the development of the new CRSP. Yet, CIAK’s counter-argument remains firm: the lack of transparency in the process is a fundamental flaw that undermines the legitimacy of the new tax valuations.
By Cornelius Korir
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