Economy

No number plates for locally assembled new cars entering port

ISUZU0612F

Workers at the Isuzu East Africa Vehicle Assembly plant on Mombasa Road during December 2018 media tour. PHOTO | DIANA NGILA | NMG

Summary

  • Locally assembled new cars can only be registered once off the production line as a complete unit, the National Transport and Safety Authority(NTSA) maintained.
  • Hared Hassan, a deputy director at the State agency said assemblers shipped in knock-down kits which cannot be registered as separate units.

Locally assembled new cars can only be registered once off the production line as a complete unit, the National Transport and Safety Authority (NTSA) maintained.

Hared Hassan, a deputy director at the State agency said assemblers shipped in knock-down kits which cannot be registered as separate units.

“Regarding the registration of locally assembled vehicles, they (local assemblers) import different parts which are then assembled,” he said in an affidavit challenging a petition filed by the Car Importers Association of Kenya (CiaK).

The association whose members import used motor vehicles are challenging a requirement that their vehicles be assigned registration number plates at the point of clearance as opposed to when selling to a buyer.

The association argues that it is being discriminated upon on the basis that dealers in imported new vehicles (franchise dealers) install car number plates at the point of the sale of vehicles to buyers.

Ciak further argues that franchise dealers are not required to pay customs and excise duties before finding buyers and that duty is paid and vehicles registered at the point of sale to the end-user.

The association says that despite its members being required to pay applicable revenue before clearing the vehicles, they are required by Kenya Revenue Authority and the NTSA to register them before exiting the taxman’s customs holding areas.

“Effectively, a motor vehicle imported by franchise dealers will attract a registration number that may be much more current than an imported used motor vehicle despite the fact that they may be held by traders for the same period of time prior to the sale of each unit to the end user,” Ciak argues.

Ciak says the requirement to have their vehicles issued with number plates at the point of exiting customs areas means that by the time they are sold, the registration will be reflecting them as older fashions, compared to those of the same age, imported later.

Ciak wants a declaration that KRA and NTSA have violated the constitution regarding the requirement that importers of used motor vehicles install number plates upon clearance, but before the use on the roads, amount to a violation.

It says that before 2009, its members were allowed to clear their imported used motor vehicles from customs area without having registration number plates but based on them bearing Kenya Garage (KG) number plates enabling the vehicles to be taken to their showrooms.

“However, the arrangement was withdrawn as against Ciak members but was left intact for the franchise dealers in imported new vehicles,” the petition states.

Ciak says that its members have been suffering huge economic losses as buyers discount a substantial amount of money on the basis that the vehicles were registered a long time ago, a situation that does not happen regarding imported new motor vehicles.