What you need to know when importing a Motor Vehicle

BLOG 27/01/2021

Are you considering importing a motor vehicle into Kenya? Well, whether new or second-hand, this is what you need to know.

To clear the vehicle through Kenya Customs, you will have to contract a licensed clearing agent to process your declaration in the KRA system. A list of licensed clearing agents is available on https://www.kra.go.ke/images/publications/clearing-agents.pdf The clearing agent will lodge an import entry in the system, pay the required duties and taxes and present all the relevant documents for Customs to pass the entry.

The vehicle must meet Kenya Bureau of Standards KS 1515:2000 – Code of Practice for Inspection of Road Vehicles before clearance.  The code spells out 3 major criteria; age limit- the vehicle should not be more than 8 years old from the year of manufacture (year of first registration), left hand drive- all left hand drive vehicles are not allowed for registration unless they are for special purpose i.e. Ambulances, Fire Tenders and large construction vehicles imported for projects and to be eventually donated to the Kenyan Government and road worthiness- all used vehicles imported into Kenya must be inspected for road worthiness, safety and other requirements.

The documents required for importation of motor vehicles and clearance through Customs include:

  1. Original Commercial Invoice.
  2. Original Bill of Lading.
  3. Import Declaration Form obtained from Customs. 
  4. Authentic Original Logbook from country of origin.
  5. Certificate of road worthiness

It is important to note that KRA does not accept a Certificate of Export issued by Dubai Police or any other authority as a substitute for a foreign Logbook. If the Logbook is in a foreign language, an English translation issued by the respective Embassy, High Commission or a Consulate based here in Kenya must be presented to Customs to authenticate the foreign logbook.

If you purchase a vehicle that was previously exempt, you are required to contact a licensed clearing agent to lodge an entry with Customs. The vehicle must be presented for inspection by Customs before the entry document is accepted. If found to conform to the required standards, the processing officer will accept payment and pass the entry upon full payment of the relevant duties and taxes.

What duties and taxes are payable? Import duty is 25% of the Customs value (CIF) of the vehicle i.e. 25% of (Invoice value + Insurance + Freight charges), Excise duty is 20% of (Customs Value + Import Duty) for vehicles with 1500 cc and below and 25% for vehicles above 1500 cc, VAT is 16% of (Customs Value + Import Duty + Excise Duty), Rail Development Levy of 2% of customs value (CIF) and Import Declaration Fee (IDF) of 3.5% of the CIF.

Example;

Toyota Auris with an engine of 1800 cc that was manufactured in January 2017

CRSP   2,355,704
Actual cc    
CRSP cc    
pro-rated CRSP   2,355,704
Profit Margin 25%  
Depreciation 40%  
Import Duty 25%  
Excise Duty 25%  
VAT 16%  
CIF   623,855.40
Import Duty 25% 155,963.85
Excise Duty 25% 194,954.81
VAT 16% 155,963.85
IDF Payable 4% 21,834.94
Railway Levy 2% 12,477.11
Duties Payable   541,194.56

The Cost Insurance and Freight (CIF) can be determined from the current retail selling price (CRSP) of the vehicle. CRSP can be determined using the current retail selling price matrix and the valuation template available on the KRA website https://kra.go.ke/en/downloads

The procedure for importing a motor vehicle is simple.  You have no reason for not owning your dream car.

 

Rhoda Wambui

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