What You Need to Know
The Kenya Revenue Authority (KRA) has come under scrutiny after announcing a significant revision to the Current Retail Selling Price (CRSP) list, which determines the taxes levied on imported used vehicles. The new CRSP, set to take effect on July 1, 2025, marks the first major update since 2019 and has sparked mixed reactions from consumers, car dealers, and industry stakeholders (1,4,7).
What Has Changed?
- CRSP Revision: The KRA’s updated CRSP list is the basis for calculating customs value, import duty, VAT, and excise duty for used vehicles. The new list incorporates recent market developments, including new vehicle models, economic shifts, and changes in exchange rates (1,4,7).
- Tax Hikes: The revision brings steep increases in excise duty and import taxes for many used vehicles, particularly those over five years old and popular models like the Toyota Probox and Nissan Note. For example, the duty on a Toyota Probox is expected to jump from about KSh 100,000 to over KSh 500,000 (2,5).
- Valuation Methodology: The CRSP now factors in detailed model specifications, such as trim levels and performance, not just engine capacity and drive configuration. This results in higher valuations for many vehicles, which raises the total tax payable (6).
- Broader Coverage: The updated CRSP includes over 5,200 unique car models, up from about 3,000 in the previous list, to reflect the expanded variety of vehicles in the Kenyan market (6).
Why the Increase?
KRA has defended the tax hikes as a necessary response to:
- Market Changes: The last CRSP update was in 2019, and since then, the dollar exchange rate has risen from about KSh 100 to KSh 130, and both import and excise duties have increased from 25% to 35% for many vehicles (4,6,7).
- Revenue Collection: The government aims to boost revenue to support national development projects and infrastructure (5,6).
- Policy Alignment: The move is intended to discourage the importation of older, more polluting vehicles, promote local assembly, and encourage the adoption of newer, more efficient models (5,6).
- Legal Compliance: The update follows a court ruling requiring public participation in tax-related changes and is aligned with international customs valuation standards (1,5).
Public and Industry Reactions
Concerns from Consumers and Dealers
- Affordability: Many Kenyans fear that used cars will become unaffordable, pushing vehicle ownership out of reach for average buyers and raising the cost of transportation and logistics (2,5).
- Market Impact: Car importers warn the new CRSP could collapse the used car market, reduce competition, and result in job losses for small and medium importers, clearing agents, and garages (2).
- Consultation Dispute: The Car Importers Association of Kenya (CIAK) has criticized KRA, claiming that stakeholder consultations were inadequate and that their input was disregarded (2).
Industry Perspective
- While dealers are largely opposed, some acknowledge the potential for the new policy to stimulate local assembly and shift demand toward newer, cleaner vehicles (5,6).
KRA’s Justification
KRA maintains that the CRSP revision is overdue and reflects current market realities. The authority insists that the process involved broad stakeholder engagement and is necessary for sustainable revenue collection, regulatory compliance, and modernization of Kenya’s vehicle fleet (1,4,6,7).
“The new CRSP is, therefore, a product of a comprehensive consultative process in which stakeholder input was considered… KRA reaffirms its commitment to a transparent and collaborative valuation process that balances regulatory compliance, stakeholder input, as well as the prevailing economic realities.” — KRA statement (6).
Impact on Vehicle Prices
- Steep Increases: Popular used models like the Toyota Passo, Nissan Vanette, and Toyota Probox will see prices rise by as much as 87–91%. The Toyota Passo, for example, is now valued at KSh 2.6 million, up 87% from before, while the Toyota Probox jumps 91% to over KSh 3.3 million (2,5)..
- Cheapest Options: Despite the hikes, some of the least expensive cars under the new CRSP include the Toyota C+ Walk T and Volkswagen New Beetle, but even these will attract higher taxes than before (3).
What’s Next?
- Market Adaptation: Consumers may shift preferences toward locally assembled vehicles or electric cars to mitigate costs (5).
- Policy Review: KRA has pledged to periodically update the CRSP to keep pace with market and economic changes (1,4,7).
- Ongoing Debate: The industry continues to lobby for a suspension of the new list and a joint technical review, while KRA stands by the changes as necessary for Kenya’s economic and environmental goals (2,6).
Conclusion
The revised CRSP and resulting tax hikes represent a major shift in Kenya’s automotive import policy. While KRA positions the move as essential for revenue, compliance, and modernization, the backlash from consumers and dealers underscores concerns about affordability and market stability. The coming months will reveal how the market adapts and whether further policy adjustments will be made.
References:
1 KRA Press Release – Clarification on Implementation of Revised CRSP
2 Eastleigh Voice – Car importers warn KRA’s new valuation list will collapse the market
3 Tuko.co.ke – New KRA list: 30 cheapest used cars in Kenya
4 The Star – KRA clarifies new car valuation formula ahead of July rollout
5 KnowClick Media – KRA Hikes Used-Car Taxes: CRSP Update Set to Push Prices Higher
6 Citizen Digital – KRA defends new pricing template that raises car import duty costs
7 Capital FM – KRA clarifies new vehicle valuation list after six-year hiatus
