The Mombasa High Court has halted a plan by the Kenya Revenue Authority (KRA) to raise taxes on used motor vehicle imports through adjusting the base on which various levies are computed by up to 40pc
On July 7th, KRA published a new Current Retail Selling Price (CRSP) –a database of prices of new vehicles in the country that forms the basis of taxing second-hand units after taking into account depreciation.
This prompted the Car Importers Association of Kenya which represents 80 dealers of used cars, to go to court to stop the implementation of the new catalogue arguing that the new CRSP was inflated and has therefore increased the final prices of some car models such as Subaru Forester SJD by hundreds of thousands of shillings.
The dealers further argued they had not been include or consulted during the preparation of the CRSP as required by the Constitution. A higher CRSP quote has the effect of inflating taxes and the ultimate yard prices of second-hand cars. The association obtained showroom prices independently and compared it with the KRA’s list to build its case, the court was told.
“Pending the hearing and determination of the petition herein, a conservatory order is hereby issued restraining the respondents (KRA) from implementing the new CRSP values from July 7, 2020,” Justice Mugure Thande ruled.
The judge further ordered the petitioner to file its submissions by August 18th and the taxman to submit its submissions by September 1st.
The case will be heard on September 22nd.
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