EDITORIAL: Revoke steep car duties

Imported cars at a yard in Mombasa on November 24, 2017. Photo | Kevin Odit | NMG
Imported cars at a yard in Mombasa. Photo | Kevin Odit | NMG 

The Kenya Revenue Authority’s decision to steeply increase duties payable on second-hand car imports by more than Sh400,000, must have come as a shock to industry stakeholders.

As car importers have rightly observed, it does not make sense to make arbitrary decisions in an era where the Constitution itself calls for public participation on important aspects of government actions.

We believe owning a car, which is tied to pricing, is an important decision for businesses and individuals that the tax agency should not execute without allowing stakeholders, including the importers and consumer associations to participate in.

Owning a car is no longer an exclusive club and any restrictions to reverse the trends would be unacceptable. Two, businesses that acquire vehicles use them to create more wealth, which indirectly influences how much the taxman collects. Three, this would be the wrong time to increase the duties since such steps were likely to slow down economic activity.

While we agree that tax targets should be met, the agency ought to see beyond the numbers and assess the effects of its actions.

We urge the taxman to revoke the levies and launch talks that would usher the country into a new car imports regime without causing abrupt changes to the lives of the taxpayers themselves.