KRA to Overhaul Second-Hand Car Taxes by July 2025
In a sweeping tax reform aimed at enhancing transparency and simplifying vehicle importation, the Kenya Revenue Authority (KRA) has announced a major change to how import duty on second-hand vehicles will be calculated. Beginning July 2025, KRA will move from the Current Retail Selling Price (CRSP) system to a taxation model based on the invoice value of imported vehicles.
The announcement was made during a recent stakeholder briefing in Nairobi, and follows long-standing complaints by car importers and clearing agents over perceived arbitrary valuations under the existing CRSP framework.
Read the official statement from KRA on their media centre.
From CRSP to Invoice-Based Valuation
Under the current system, second-hand car imports into Kenya are taxed using CRSP figures, which are set internally by the KRA. These valuations often don’t reflect the actual price paid for a vehicle, leading to disputes and inflated tax bills. Starting July 2025, duty will instead be based on the invoice value submitted by the importer, verified through international price databases and shipping documents.
This new approach will be implemented through the Integrated Customs Management System (iCMS), a digital platform designed to streamline clearance and eliminate discrepancies.
You can explore how taxes are currently computed using our KRA Motor Vehicle Import Duty Calculator.
Why the Shift?
KRA Commissioner General Humphrey Wattanga noted that the change aims to enhance fairness, predictability, and efficiency. Speaking during a public address covered by Business Daily Africa, he said:
“We are aligning with international best practices where the invoice value, rather than arbitrary local valuations, forms the basis of import taxation.”
This reform is part of the broader effort by KRA to digitise tax collection and reduce import-related disputes, while also meeting Kenya’s commitments under WTO trade facilitation agreements.
What This Means for Importers
The shift is especially good news for individual buyers and smaller importers who often purchase vehicles at auctions or from dealerships in countries like the UK and Japan. These buyers usually face higher import duty charges when their invoice price differs from KRA’s CRSP estimates.
For instance, someone planning to import a car from the UK to Kenya could benefit significantly under the new system by paying tax that accurately reflects what they spent.
Additionally, for those unfamiliar with Kenya’s customs process, our Clearing and Forwarding in Kenya guide offers detailed assistance.
Industry Reaction
According to The Standard, industry stakeholders including the Car Importers Association of Kenya (CIAK) have welcomed the move. CIAK Chairperson Peter Otieno said the new valuation method will restore trust and reduce the dominance of clearing brokers who take advantage of valuation uncertainties.
However, he cautioned that implementation and training will be crucial to avoid chaos when the system goes live in 2025.
Preparation and Timeline
With a deadline set for July 2025, importers have just over a year to familiarise themselves with the new policy. KRA has promised a robust awareness campaign and continuous stakeholder engagement.
To stay updated, follow the latest policy developments via our Kenya Car Import Regulations page.
For a detailed cost breakdown under the current system, see our article: How Much Does It Cost to Import a Car from UK to Kenya?
Summary
Kenya’s decision to switch to invoice-based vehicle taxation is a landmark step toward fairer and more predictable import procedures. It’s expected to significantly benefit private importers and encourage legitimate trade, provided the transition is handled smoothly.
External sources:
KRA Official Guide to Importing Vehicles
Business Daily: KRA Overhauls Car Taxation
Standard Media: KRA’s Used Car Taxation Shift