Price of 2nd-hand Imported Cars to Surge 43% with New KRA Tax Formula
The price of used imported cars could surge due to increased taxation. The Car Importers Association of Kenya (CIAK) estimates a 43 percent increase in retail prices this year with the new Kenya Revenue Authority’s formula of calculating tax.
New CRSP Raises Concerns
The new prices of second-hand imported cars have raised concerns among stakeholders who claim that they were not consulted. As a result, KRA will delay the execution of the current retail selling price (CRSP) chart that was recently unveiled until consultations to resolve the matter with stakeholders have taken place. Despite this postponement, KRA wants Kenyans to prepare themselves for a rise in prices anyway.
“The new CRSP has caught importers by surprise as it has not been placed on the KRA website or discussed with the industry players making it difficult to sell the affected fleet of vehicles that have been attracting storage charges,” Peter Otieno, national chairman CIAK stated.
For instance, a 3500cc Lexus RX450 that went for Sh6,982,000 in 2017 now goes for Sh11,525,368 while a Toyota Land Cruiser has increased from Sh17.9 million to Sh21,671,820.
“We cannot be in business if taxes suddenly increase to almost 68 percent […]. As an association, we believe that a unit that was manufactured in 2011 cannot be, by all means, higher [in price] than a vehicle currently in production,” Otieno said.