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Wednesday, May 27, 2020

Customs Duty: How duty for your car is calculated in Kenya

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Car Duty Kenya: In Kenya, the value of a model is calculated based on the Current Retail Selling Price (CRSP) for that specific model, adjusted for depreciation at a rate of 10 percent per year.

Insurance and freight charges are added to the adjusted CRSP to arrive at the customs value.

The vehicle then attracts an import duty of 25 percent, excise duty (ranging from 25 percent to 35 percent) and value added tax of 16 percent, payable cumulatively and in that order.

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A higher CRSP quote, therefore, has the effect of inflating taxes and the ultimate yard prices of second-hand cars.

In Kenya, though, the Kenya Revenue Authority is known to alter how taxes are calculated for imported vehicles. For example, in the draft Current Retail Selling Price (CRSP) April 2020, several models of Honda Fit, a small hatchback, are listed at prices ranging from Sh. 3.2 million to Sh. 3.5 million. This is more expensive than Mercedes B-Class, a luxury minivan whose price is set at Sh. 3.1 million.

According to the KRA Duty Calculator, a 2013 Harrier with 2400cc manufactured in the month of August will demand the following taxes:

Current Retail Selling Price(CRSP): Kes 5,157,000

Customs Value/CIF: Kes:  948,413

Depreciation Value: 60% Depreciation

Import Duty: Kes 237,103.45

Excise Value: Kes 237,103.45

VAT Value: Kes 227,619.31

Total Taxes: Kes 701,826.21

Import Licence (IDF fee): Kes 18,968.28

Railways Development Levy: Kes 14,226.21

Total Taxes and Levies: Kes 735,020.69

 The KRA Calculator also gives the following results for a 2013 Toyota Premio T260 model manufactured in June:

Current Retail Selling Price (CRSP): Kes 3,993,300.00

Customs Value/CIF: Kes 734,400.00

Depreciation Value: 60% Depreciation

Import Duty: Kes 183,600.00

Excise Value: Kes 183,600.00

VAT Value: Kes 176,256.00

Total Taxes: Kes  543,456.00

Import Licence (IDF fee): Kes 14,688.00

Railways Development Levy: Kes 11,016.00

Total Taxes and Levies: Kes 569,160.00

Car Duty Kenya: In the below the table, we picked 3 cars in different categories to show the difference in tax value between as was in year 2018 when KRA used a flat tax charge model:

Car Duty Kenya

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