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GOOD NEWS FOR CAR IMPORTERS

Taxes paid on used motor vehicles look set to drop significantly in the coming months after the High Court in Mombasa declared the current tax computation formula used by the Kenya Revenue Authority (KRA) illegal.

The taxman 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 shipped in from overseas markets.

Used car dealers argued in court that the starting quotations, known as current retail selling prices (CRSP), are inflated and therefore result in unfairly higher taxes running into millions of shillings for those dealing in used imports.

They also say the process is unconstitutional since it locks them out, meaning that there is no public participation.

In a case filed by Car Importers Association of Kenya, the judge ruled in favour of the petitioners and found KRA’s taxation of used cars to be unfair and arbitrary.

 

SOURCE: BUSINESS DAILY