A Mombasa High Court has declared the tax computation applied by Kenya Revenue Authority (KRA) as illegal in a move that is set to see cost of vehicles come down to the relief of importers and local buyers.
KRA has been using price quotations from dealers of new vehicles such as Toyota Kenya as the basis for calculating import duties and other levies on second-hand cars imported into Kenya.
Used car dealers complained that such quotations, known as current retail selling prices (CRSP), result in extreme and unrealistic taxation.
The case was filed by Car Importers Association of Kenya as Justice Eric Ogola ruled KRA’s taxation of used cars to be unfair and arbitrary.
“A declaration that for purpose of continuity and in the interest of the public the transactions already effected via the said CRSP … shall continue to apply until such a time as the respondents will establish a new CRSP value in accordance with the law within 12 months from the date of this judgment,” Justice Ogola ruled.