NAIROBI, Kenya, Apr 4 – The Kenya Revenue Authority(KRA) freeze on raising taxes on used motor vehicle imports has been extended by the Court of Appeal.
Justices Patrick Kiage and Roselyn Nambuye stated that KRA would impose higher taxes after the conclusion of the suit, declining to lift the order.
“The loss to be suffered by the public and the upsetting of good order override any loss apprehended to be suffered by the applicants. It is a loss that can be recovered as the government has sufficient machinery to do so,” Justice Kiage said in the ruling.
Car Importers Association of Kenya, moved to court looking for the suspension of the implementation of the new Current Retail Selling Price (CRSP) catalogue the taxman had published in 2020.
The CRSP new formulae that forms the basis of taxing second hand units which Car Importers say is inflated and has the potential to increase the final prices of some car models by hundreds of thousands of shillings as it has been adjusted upwards by 40 percent.
“The freeze order issued by Justice Thande Mugure was done in the interest of the public. Lifting the freeze would amount to predetermining the matter, which remains pending at the High Court. Not only will issuing the stay be contrary to the public interest, but it will also upset good order as created by the conservatory order,” Justice Kiage said.
The suspension of the new CRSP has saved importers from higher taxes as the case continues amid record vehicle prices.
However, despite the freeze, used car prices in Kenya have gone up by an average of 37 percent in the past six months as demand exceed supply.
According to Kenya Auto Bazaar Association, Japanese models such as Toyota Harrier, Toyota Fielder, Toyota Rav 4, Toyota Premio and Nissan X – Trail have seen their import prices go up by a range of between Sh408,000 and Sh791,000 since August 2021.
The landed price of low-range cars such as Vitz increased 44 percent to Sh1.07 million while the cost of Nissan Note increased by 39 percent to Sh938, 000.
Mainly affected are vehicles registered in 2015, which are those within the eight years allowed as imports into the country.
