KRA Clarifies New Import Rules for Car Dealers
The Kenya Revenue Authority (KRA) has defended new cargo clearance requirements, saying importers are legally required to file export declarations when clearing imported goods.
In a statement issued on 7 September, KRA said the requirement is based on Section 23B of the Tax Procedures Act, introduced through the Finance Act 2026 and effective from 1 September. The provision requires importers to obtain and retain export documentation from the country of origin.
The documents may include export declarations or equivalent certificates and must be kept for at least five years. KRA said the records will help verify the legitimacy of import transactions and support tax compliance.
The clarification followed concerns from the Kenya International Freight and Warehousing Association (KIFWA) and other industry stakeholders, who have argued that the new requirements could make the clearance process more complicated and increase costs for businesses.
KRA said failure to produce the required documents during an audit could result in the reassessment of an importer’s tax obligations. The new requirement comes as businesses are also following a separate debate over a proposed increase in the customs benchmark from Ksh2.5 million to Ksh3.2 million.
The changes have drawn particular concern in the motor vehicle sector, where disagreements over vehicle valuation are already before the courts. KRA has declined to discuss its valuation methodology, citing the sub judice principle.
The Car Importers Association of Kenya (CIAK) has repeatedly challenged KRA’s valuation approach, arguing that the use of the Current Retail Selling Price (CRSP) framework was unconstitutional because there had not been adequate public participation.
Previous court rulings required KRA to resume consultations with stakeholders over vehicle valuation methods, including Free on Board (FOB) prices and CRSP indices. Resistance among vehicle dealers has continued, particularly over concerns that changes to valuation could increase taxes on popular models such as the Vitz, Demio and Swift.
KRA maintains that the new documentation requirements are intended to address undervaluation and misdeclaration of imported goods. Importers, however, have raised concerns about additional administrative requirements at a time when operating costs are increasing.
