Used vehicle dealers oppose KRA’s new pricing regime


Used vehicle dealers oppose KRA’s new pricing regime

In Summary

  • In a letter addressed to the Customs and Border Control Acting Commissioner dated May 22, the association of used car importers argue the new draft pricing database favours franchised dealers at their expense contrary to a recent court ruling.
  • According to the used vehicle dealers, the pricing of imported motor vehicles as per the current draft will lead to inflated costs of used motor vehicles to end users.
  • CRSP values are used to compute import duty payable to KRA by clearing and forwarding agents who encompass motor vehicle dealers.

Used vehicle dealers have opposed the Kenya Revenue Authority (KRA) draft current retail selling prices for imported motor vehicles terming the new data base as discriminatory.

In a letter addressed to the Customs and Border Control Acting Commissioner dated May 22, the association of used car importers argue the new draft pricing database favours franchised dealers at their expense contrary to a recent court ruling.

“We say so because some the current retail selling prices (CRSP) values are a replica of values which the franchise are using. This is contrary to the High Court ruling pf 16/10/2019 where the court observed that interests of motor vehicle dealers should be given first priority,” reads the letter by the National Chairman to the Car Importers Association of Kenya Peter Otieno in part.

Further, the dealers claim some prices lack in simple logic as the price of standard saloon vehicles surpass those of luxurious vehicles.

“If we take the CRSP value of a vehicle like Honda Fit which is Ksh.3,700,000 and compare it with the value of a luxurious vehicle like Mercedes Benz B Class which is Ksh.3,100,000, it is clear some of the CRSP values lack simple logic,” adds the letter.

Further, the dealers who comprise of membership drawn from over 80 showrooms across the country argue the increase of CRSP values beyond the inflation rate over the past 12 months is illogical, lamenting the new data base is set to cripple the businesses of used motor vehicle dealers by hiking consumer prices.

CRSP values are used to compute import duty payable to KRA by clearing and forwarding agents who encompass motor vehicle dealers.

According to the used vehicle dealers, the pricing of imported motor vehicles as per the current draft will lead to inflated costs of used motor vehicles to end users.

The dealers now call for a consistent, fair and equitable pricing regime for motor vehicles as per year of manufacture and not year of import.

The pricing of motor vehicles has remained the subject of contention between dealers and the tax man with petitions against the regime dating back to 2018.

KRA subjected the proposed pricing mechanism to public participation on April 29 through to May 7.

Car importers are now seeking to have the draft set aside and a meeting convened between dealers and KRA.

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Story By Kepha Muiruri
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