At the moment, Kenya applies an eight-year age rule on second hand vehicles while Tanzania has a 10-year limit.
The rest of the East Africa Community members do not have age restrictions on second hand car imports.
Kenya’s vehicle assemblers have turned to the regional parliament, seeking steeper taxes for second-hand cars.
The assemblers have appealed to the East African Legislative Assembly (EALA) to have all second-hand vehicles subjected to higher tariffs than the 25 per cent currently levied on both old and new vehicles.
Through the regional umbrella body for businesses, the East African Business Council, the firms also want the bloc to adopt a uniform age limit rule for second hand vehicles.
At the moment, Kenya applies an eight-year age rule on second hand vehicles while Tanzania has a 10-year limit. The rest of the East Africa Community members do not have age restrictions on second hand car imports.
“The support required includes full implementation of 25 per cent import duty as per the current common external tariff as well as a split between new and used vehicle in the HS code,” the regional lobby said, citing tariffs of up to 100 per cent in other economies. Used cars make up more than 80 per cent of the EAC vehicle market due to their lower prices.
“The auto industry has a potential to contribute 10 per cent of employment in the economy as well as tax revenues for governments,” EABC says in its presentation to the regional parliament.
Kenya has three vehicle assemblers: Thika based Kenya Vehicle Manufacturers, General Motors East Africa (GMEA), and the Associated Vehicle Assemblers.
DT Dobie, Toyota, GMEA, Simba Colt and CMC also sell new cars under franchise agreements.
Last month, the region’s presidents were presented a report recommending that adoption of a five-year age rule by 2021 could greatly improve the car assembling business.
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