KRA plans to revise its tax valuation schedule for imported second-hand vehicles.
KRA is consulting motor industry players on a revised valuation schedule that could change taxes on imported second-hand vehicles.
The Kenya Revenue Authority (KRA) plans to introduce CRSP Version II, a revised valuation schedule for imported second-hand vehicles. The changes could affect the taxes importers pay when bringing used cars into Kenya.
Commissioner General Adan Mohamed said KRA was discussing the proposed framework with motor vehicle industry players. He spoke during the Institute of Certified Public Accountants of Kenya’s 43rd Annual Seminar in Mombasa.
Mohamed said the discussions aim to establish duty payable depending on a vehicle’s age and the country of import.
How CRSP Version II could affect import taxes
The Current Retail Selling Price schedule provides reference prices that KRA uses to establish customs values. It considers a vehicle’s make, model, specifications and year of manufacture.
Under the existing framework, KRA does not calculate taxes solely from the price an importer pays. Instead, it establishes a reference value through the schedule, then applies depreciation based on the vehicle’s age.
The resulting customs value forms the basis for calculating import duty, excise duty and Value Added Tax. As a result, two importers who pay the same purchase price can face different tax bills.
For example, buying a used car for Ksh2 million does not necessarily mean KRA will tax that amount. The authority first determines its customs value through the CRSP framework.
A revised schedule could therefore change the values KRA assigns to different models and the resulting taxes payable.
Dealers can move cleared cars before registration
Meanwhile, KRA has introduced a separate change allowing licensed dealers to move imported used cars to their premises before registration. Dealers must first pay all applicable customs duties, taxes and levies before taking vehicles out of customs yards.
However, they can defer NTSA registration fees and levies until they find a buyer. KRA said the arrangement followed a directive from President William Ruto through the National Transport and Safety Authority.
Under this process, dealers must obtain a Kenya Dealer identifier from NTSA. The identifier links to the vehicle’s chassis number, and the customs system must capture it before release.
Dealers can then transfer cleared vehicles to their yards while seeking buyers. Formal registration follows the sale.
