Disquiet is deepening among second-hand vehicle dealers as Kenya Revenue Authority (KRA) readies to switch to a new Current Retail Selling Price (CRSP) on July 1, 2025.

KRA argues that the new CRSP, which revises how import duty on second-hand cars is calculated, will enhance transparency and simplify the process of importing a vehicle.

However, car dealers in Kenya are skeptical that the move to a new taxation model based on the invoice value of imported vehicles will significantly increase the car purchase price.

The new system will see duty assessment set at the importer’s invoice value based on shipping documents submitted via the Integrated Customs Management System (iCMS).

The move, according to KRA, was necessitated by complaints raised by car importers and clearing agents over apparent arbitrary valuations under the existing CRSP framework.

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Under the existing system, which is set to be replaced from July 1, 2025, second-hand vehicles imported into Kenya are taxed using CRSP figures which KRA sets internally.

KRA Commissioner General Humphrey Wattanga says the changeover is aimed at fostering fairness, predictability, and efficiency even as murmurs continue among Kenya’s car dealers.

Wattanga says KRA is aligning its car duty systems with the global best practices in which the invoice value forms the basis of import taxation as opposed to arbitrary local valuations.

Kenyan second-hand car dealers mainly source their units from Japan and UK and are charged higher import duty when their invoice price differs from KRA’s CRSP estimates.

Car Importers Association of Kenya (CIAK) Chair Peter Otieno lauded the move saying the new system will tame dominance of clearing brokers taking advantage of unclear valuation.

He, however, called for training and smooth handling of the transition process from July 2025 to quell the disquiet among car dealers on its implications to their battered sector.

Car importers, dealers, and buyers are cautiously optimistic ahead of the launch with the digital, document-intensive process set to test to the limit the readiness of key players.

Key players in the vehicle importation and sale sector are waiting with bated breath to see the impact the new system will have on importation and retail prices in local showrooms.