This archive report was first published on 21 May 2020.
Calculating duty for your car in Kenya involves several steps, starting with the Current Retail Selling Price (CRSP) of the vehicle.
According to the Kenya Revenue Authority (KRA), the CRSP is adjusted for depreciation at a rate of 10 percent per year, which means that the value of the car decreases by 10 percent every year.
Insurance and freight charges are then added to the adjusted CRSP to arrive at the customs value.
The vehicle then attracts an import duty of 25 percent, excise duty (ranging from 25 percent to 35 percent), and value-added tax of 16 percent, payable cumulatively and in that order.
DT Dobie recently launched the Mercedes Benz 1500cc in Kenya, which has a higher CRSP quote than some other models, resulting in higher taxes and yard prices for second-hand cars.
However, the KRA has been known to alter how taxes are calculated for imported vehicles, as seen in the draft CRSP for April 2020, which listed several models of Honda Fit at prices ranging from Sh. 3.2 million to Sh. 3.5 million, making them more expensive than the Mercedes B-Class.
Using the KRA Duty Calculator, we calculated the taxes for a 2013 Harrier with 2400cc manufactured in August, which included a customs value of Kes 948,413, depreciation value of 60%, import duty of Kes 237,103.45, excise value of Kes 237,103.45, VAT value of Kes 227,619.31, and total taxes of Kes 701,826.21.
Similarly, for a 2013 Toyota Premio T260 model manufactured in June, the KRA Calculator gave the following results: customs value of Kes 734,400.00, depreciation value of 60%, import duty of Kes 183,600.00, excise value of Kes 183,600.00, VAT value of Kes 176,256.00, and total taxes of Kes 543,456.00.
For comparison, we picked three cars in different categories to show the difference in tax value between the old flat tax charge model used in 2018 and the current system.
