The taxman says it has not introduced a new car import duty calculation formula.
KRA says updating of the CRSP is usually undertaken twice annually, adding that importers' grievances will be heard upon presenting documentary evidence.
The association had objected to the 43 per cent tax on used motor vehicles being imposed by KRA which took effect on February 5, 2018.
The Kenya Revenue Authority (KRA) has denied that it made changes to the Current Retail Selling Price (CRSP) that would lead to higher cost of some second hand motor vehicles imported into the country.
The Commissioner for Customs and Border Control has denied claims that the tax agency has introduced any new car import duty formula.
“It is important to note that KRA has not introduced a new car import duty calculation formula. On a need basis, KRA’s Valuation and Tariff section undertakes periodic updates of the applicable Current Retail Selling Price (CRSP) for any model not included in the previous CRSP released. Usually, this is highlighted by referrals and request from both internal and external stakeholders, and to eliminate ambiguity where a similar motor vehicle would be declared with a different description thus ensuring application of a uniform CRSP for the model,” KRA said in response to queries on the matter.
The taxman says updating of the CRSP is a routine exercise that is usually undertaken twice annually, adding that importers' grievances will be heard upon presentation of documentary evidence.
“It is the taxpayer’s constitutional right to be heard and any dispute raised...with documentary evidence, which include an invoice, evidence of payment, to support the transaction values,” KRA said.
The taxman said he had also responded to a January letter by Car Importers Association of Kenya (CIAK) that sought suspension of the new CRSP until pending issues are resolved.
The latest development puts the revenue collector on a collision course with car dealers who feel the KRA is overstepping its mandate on the matter.
KRA had in a letter dated February 6 and directed to the importers' lobby stood its ground insisting its valuation and tariff unit is mandated to guide the department.
“We took note of the content of your letter and especially the genesis of CRSP and your concurrence that it addresses the intended purpose of fairness to all. We want to advise that valuation and tariff unit is mandated to guide the department and business through periodic updates and on need basis the applicable CRSPs for any model not included in the previous CRSP released. It is important to note that nothing shall be construed as restricting or calling into question the rights of customs administration to satisfy themselves as to the truth or accuracy of any statement, document or declaration presented for custom valuations purposes,” KRA said in the letter to CIAK.
“Our stand as importers is that we must sit down with the revenue collector to address this matter which is affecting the car import business,” said CIAK chairman Peter Otieno.
The association had objected to the 43 per cent tax on used motor vehicles being imposed by KRA which took effect on February 5, 2018.
The new taxes will see high end models like Toyota Land cruiser URJ201/202-GNT V8 (5663) cc retail at Sh21.6 million and attracting duty of Sh2.3 million. In 2017 the same model was selling at Sh17.9 million and attracting Sh1.9 million tax, which is a 20 percent increase.
Lexus R450 (3500) cc will now retail at Sh11.5 million and attracting a duty of Sh 1.2 million. Last year the same model retailed at Sh6.9 million and attracting a duty of ShSh768, 127, an increase of 63 percent.
Honda CRV RM4 (2400) cc will now retail at Sh7.3 million attracting a duty of Sh801, 719 a 25 percent increment from last year. In 2017 the same model retailed at Sh5.8 million attracting a duty of Sh641, 296.
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