New car rule offers KRA hope of more cash

Kenya Revenue Authority targets more revenue from a rule requiring new vehicle owners to have their logbooks updated before insurance is issued.

A new vehicle owner could, prior to the rule, be issued with an insurance cover even if the logbook did not reflect a change of ownership, denying the taxman the fees charged on transfer of ownership as some opted not to incur the expense.

“Since February, we have been receiving at least two thousand applications for vehicle transfers every day,” said Simon ole Kirgoty, Motor Vehicles Registrar .

This is an increase from an average of 200 requests before the rule became effective in January this year.

The registrar said the number of motor vehicles that have not been transferred to their new owners was still high.

Transfer of motor vehicle takes four days and costs vary depending on the engine capacity of the vehicle.

Vehicles with capacity of 1201cc to 1500cc for example pay Sh2,065 while those with capacity of 3001cc and above cost Sh5,915 to transfer.

Poses challenge

Motor vehicles owners have been to taking insurance cover even when the logbooks have not been transferred in their names.

One of the major risks in this case, industry sources say, is that in case of an accident, claims cannot be paid because the vehicle is not in their name.

“The rule of the insurance is that if it is not registered in your name, then it does not belong to you,” said Nelson Kuria, the CEO of Cooperative Insurance Company. “The general public should note that sale agreements are not substitutes for logbooks and henceforth such agreement shall not be used to insure motor vehicles and trailers.”

The new rule will also help the government to mop-up vehicles that were stolen and given fake registration numbers.

Incidents where unsuspecting vehicle owners are sold for stolen vehicles that bear number plates to legally registered vehicles has become more prominent, according to Kenya Police reports, because of failure by buyers to make registration search at the KRA before they buy a vehicle.