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Car importers lose in pushing KRA to harmonise eight-year age limit

Car Importers Association of Kenya (CIAK) Chairman, Peter Otieno (C) addresses the press in a past briefing.
The High Court has dismissed a case by car importers seeking to compel Kenya Revenue Authority (KRA) and Kenya Bureau of Standards to harmonise the computation of eight-year age limit rule used for the importation of second hand vehicles.
Car Importers Association of Kenya, which brings together 73 car dealers, had protested that there was disharmony in the method used by Kebs and that of KRA, causing its members to incur huge economic losses while paying duty and in other instances, rejection of some vehicles into the Kenyan market.
The court heard that there was disparity given that KRA starts counting the eight years at the beginning of the year when the car was registered, disadvantaging cars listed in months after January. But Kebs hinged its count on the month when the car was registered.
Justice John Mativo, however, dismissed the petition saying the car importers were inviting the court to legislate, which is the work of Parliament.
“In view of my analysis of the law, facts and authorities enumerated above, I find that this Petition fails,” the Judge said.
The car importers said the duty payable for any imported vehicle is often calculated by the KRA based on the year of registration of the vehicle which makes it difficult for a vehicle seller to convince a client that the duty paid for two vehicles with same year of manufacture was different.
This, the court heard, causes the seller to sell the vehicles at same price thereby causing them loss for the vehicle whose duty was high.
They told the court that the showroom owners often find themselves in a dilemma whereby a fleet of cars is denied entry based on KRA computation system even when the cut-off year limit has not been fully attained.
In reply, KRA said it applies the Transaction Value Method or the Current Retail Selling Price (CRSP) Method (as an alternative), which is a form of Deductive Value method, that considers the age of the vehicle for depreciation purposes. – businessdailyafrica.com