KRA logbooks crisis slows down motor vehicle trade
KRA headquarters in Nairobi.. The shortage of logbooks at the Kenya Revenue Authority headquarters at Times Tower has bogged down the transfer of motor vehicles - both new and old - and motorcycles, straining the cashflows of dealers.. Photo/FILE.
A logbook crunch has persisted for weeks now, delaying new registration of motor vehicles and in turn afflicting business in sectors, including banking.
The shortage of logbooks at the Kenya Revenue Authority (KRA) headquarters at Times Tower has bogged down the transfer of motor vehicles - both new and old - and motorcycles, straining the cashflows of dealers.
Dealers said they are stuck with stocks in their yards as consumers are not willing to buy them without logbooks.
“We have about 100,000 cars that were supposed to have been bought which are still here due to lack of logbooks,” said Charles Munyori, the chairman of Kenya Autobazaar Association (Kaba). That means they cannot order new units.
Government officials say the glitch follows the logbooks in stock being deemed to have been procured without following procedure.
“We are currently issuing copies of our online documents for the buyers to use as logbooks in the interim, but we intend to tackle the problem from today,” said Registrar of Motor Vehicles Francis Meja.
He said KRA was issuing alternative documents to buyers before the problem is sorted out this week.
“We are currently issuing copies of our online documents for the buyers to use as logbooks in the interim, but we intend to tackle the problem this week,” said Mr Meja.
He declined to disclose the nature of the procurement delays. However, sources said extra logbooks were delivered with the previous order, but could not be issued until the sale was regularised.
In the meantime, KRA cannot buy new logbooks because they have them in stock. It is not clear why the supplier delivered more logbooks than was indicated in the local purchase order.
In May, KRA floated tenders for a new supplier of logbooks.
Dealers say it now takes up to two months to get a logbook from KRA, compared to two weeks previously.
Dealers at Car and General said that it currently takes even two months to get a single vehicle logbook and this has reduced their sales.
“When people want to buy a vehicle they expect to get their logbooks instantly - they easily change their mind on realising you don’t have one.
We are supposed to be selling more cars than we are doing,” said Joseph Mulwa, the logistics co-ordinator Car and General, motor vehicle dealer.
“For instance, if you order 100 logbooks from KRA you get about half and the rest will take too long to come,” he added.
KRA used to send logbooks to buyers through the post office three months ago. This was, however, stopped when the taxman started issuing the logbooks immediately after the purchase of the vehicle.
The situation has deteriorated in the three months because of lack of confidence in the alternative papers being issued by KRA.
Passenger Service Vehicles (PSV) operators have complained to motor dealers that they cannot get Transport Licensing Board (TLB) licenses to operate without logbooks.
“PSV operators are having difficulty obtaining a licence from the TLB as the receipts from KRA are not being recognised,” said Ferdinand Gideon, the head of logistics at Associated Motors Ltd, suppliers of PSV vehicles.
“The problem is that we don’t know what is happening. KRA should make the issue public so that our clients don’t blame us for this inconvenience.” Those seeking financing from commercial banks are said to be affected as banks ask for the logbooks to advance loans.
The communications manager at KRA, Kennedy Onyonyi, however, said that some people were transacting using documents provided by KRA in place of logbooks, adding that some books were ready for issuance.
Auto dealers say they are faced with credibility problems when they deliver vehicles to their clients without all documentation.
The number of motorcycles sold dropped by 30 per cent to 38,000 units in the first five months of the year, a situation attributed to slow processing of logbooks and subsequent slowdown in financing of purchases. Most motorcycle buyers purchase them through loans provided by micro-financiers.
The number of motor vehicles sold in the first five months of the year, however, still increased by eight per cent from 23,865 to 25,856.
The taxman is also forfeiting revenue as buyers postpone acquiring vehicles until they get logbooks.
Mr Mulwa says that insurance companies are also refusing to insure vehicles without proof of ownership.
The managing director of Heritage Insurance, John Milne, said there were a number of cases where KRA was not submitting logbooks.
Insurance companies, however, have a three-month window within which they can issue a cover without a logbook.
The cover is, however, cancelled if the owner fails to present the logbook during the grace period.
“Because of this reason the insurance sector has not been affected as such so far,” said Beatrice Hioyhu, director in charge of underwriting and claims at Heritage Insurance.
However, she noted it would be difficult to process claims if a car that had no logbook was involved in an accident.
