The Kenya Revenue Authority (KRA) has stated that the Current Retail Selling Price (CRSP) guidelines for used motor vehicles imported into Kenya will be revised on July 1, 2025. The new valuation process could have major effects on the used car market in Kenya, changing things for importers and consumers.
The new CRSP wants to create a fair and accurate system for setting duties on second-hand vehicles. The previous method used to set retail prices which could result in misunderstandings, but now the updated schedule will check the actual prices paid from invoices and receipts. The change happened because of a lot of stakeholder feedback, including that of the Car Importers Association of Kenya (CIAK), who had earlier taken the KRA to court over the same issue.
The new CCSPF regime sets the customs value for used vehicles by using the new CRSP which takes into account age-related depreciation. For this reason, the tax benefits for older cars may be outweighed by the increased import costs expected for popular models.
Major Changes and Their Potential Impact
Start Using Invoice Value: The change to using the actual invoice value of the vehicle, together with the CRSP, is necessary and the higher of the two values is what will be used for customs. It is to make sure taxes are fairer and there are less cases of importers being overcharged.
Updated CRSP List: Newer car models are now included in the updated CRSP list on the KRA website which replaces the 2019 list. Importers should take time to learn about the new list.
Revised Duty and Excise Rates: Although the main tax framework is unchanged, the new CRSP may cause changes in the amount of duty you pay. Now, the tax system is made up of: The amount of Import Duty which is 35% of the customs value. Engine size determines the Excise Duty which can be from 25% to 35% and is added to the customs value and import duty. Value Added Tax (VAT) is 16% of the customs value, import duty and excise duty all added together. The Import Declaration Fee (IDF) is 3.5% of the customs value, or a minimum of KES 5,000. The Railway Development Levy (RDL) is 2% of the customs value.
Potential Price Fluctuations: Depending on the model and its current price, the new method may result in changes in the amount of import taxes. Some studies predict that the duties for the Nissan Note, Mazda Demio, Toyota Probox and Toyota Vitz could go up significantly. On the other hand, the VW Tiguan 1.4 TSI and some Toyota Prado cars may be subject to less duty.
Increased Scrutiny and Compliance Burden: Since taxation is based on invoices, importers will have to take care of their documentation, making sure to keep real purchase invoices, proof of payment and shipping documents. The KRA plans to focus more on spotting under-invoicing and help maintain compliance.
Boost for Local Used Car Market: As it becomes more expensive to import some used cars, people expect the demand for local used cars to increase. It may boost the automotive industry at home and lead people to think about less costly local options.
The KRA points out that digitizing the process, reducing import disputes and matching international norms for valuing vehicles are all part of the reform. Importers and other stakeholders should check the KRA website for the updated CRSP list and to learn about the changes fully. The coming months ahead will show the real effects of the new CRSP on used car prices and supply in Kenya.