KRA Announces Tax Deferral for Second-Hand Car Importers

KRA Announces Tax Deferral for Second-Hand Car Importers

In a recent move aimed at supporting the automotive industry and easing the financial burden on importers, the Kenya Revenue Authority (KRA) has announced a significant measure of tax deferral for second-hand car imports. The decision comes as a welcome relief to many individuals and businesses involved in the importation of used vehicles, allowing them to navigate the challenging economic landscape more effectively. In this blog post, we will delve into the details of this announcement and explore the potential impact it may have on the industry.

Tax Deferral for Second-Hand Car Importers

The KRA’s decision to defer taxes for second-hand cars is an effort to stimulate economic growth and alleviate the financial strain experienced by businesses and individuals. Under this new policy, importers will be granted a temporary postponement on the payment of taxes, allowing them greater flexibility in managing their cash flow during the initial stages of the importation process.

Significance for the Automotive Industry

The automotive industry plays a crucial role in Kenya’s economy, contributing significantly to employment and revenue generation. However, in recent years, the sector has faced various challenges, including increased competition, changing consumer preferences, and the impact of the global economic downturn. The tax deferral initiative is expected to provide a much-needed boost to the industry by reducing the financial burden on importers and fostering a more conducive business environment.

Benefits for Importers

By deferring taxes, importers of second-hand vehicles will have more working capital available to invest in other aspects of their businesses. This will enable them to enhance their operations, such as expanding their inventory, improving their marketing efforts, or upgrading their facilities. Additionally, the deferral will offer importers a window of opportunity to adapt their strategies to evolving market demands and consumer preferences without being burdened by immediate tax obligations.

Promoting Consumer Accessibility

The tax deferral policy has the potential to make imported second-hand cars more affordable and accessible to consumers. By reducing the tax burden on importers, it is expected that the cost savings will be passed on to the end-users in the form of lower prices. This, in turn, can create a more competitive market, stimulate consumer demand, and contribute to overall economic growth.

Government Revenue Considerations

While the tax deferral may initially result in a reduction in government revenue, it is important to consider the broader economic impact. By supporting importers and fostering a healthier automotive industry, the government can benefit in the long run through increased tax contributions from a more vibrant sector. Furthermore, the policy may attract more participants into the importation business, expanding the tax base and creating a sustainable revenue stream.


The KRA’s decision to defer taxes for second-hand car importers is a significant step toward bolstering the automotive industry in Kenya. By providing importers with greater financial flexibility, this initiative aims to revitalise the sector, promote consumer accessibility, and stimulate economic growth. As businesses and individuals reap the benefits of this policy, we can expect to witness a renewed sense of optimism and resilience within the automotive industry, paving the way for a brighter future.


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