How true is the KSh49 billion ($4.8m) import tax Kenya’s used car dealers claim they pay annually? Since the new draft national automotive policy made by Kenya government, which limits the age and make of used cars that are imported into the country, Kenya’s used car dealers have not had it so easy. The Kenya Auto Bazaar Association, made up of traders who import and sell used cars, recently employed the pages of national newspapers to make an appeal to the Presidency that they are: “contributing to the national government in excess of KSh49 billion in taxes annually, Please Mr President, please don’t shut us out,”
Kenyan used car dealers contribute significantly to IGR, but are the figures true
Kenyan used car dealers, like their Nigerian counterparts, sell cheaper, foreign used vehicles to its citizens, as many Africans cannot afford a new car. Confirming how true this amount is, the press contacted the auto association’s chairperson Major (Rtd) John Kipchumba, who signed the appeal with his secretary, Charles Munyori. Munyori stated that the association did not have tax figures, which are published, but instead they made an estimation of the figure. Speaking on how they arrived at the figure, he said:
“What we did is that we worked on some figures. The number of imports, so the number of used vehicles that are imported into the country every year, and then we took the average duty.”
He said that KSh450,000 ($4,455) which is the “average tax” they paid to import a typical 1,500 cc engine capacity saloon car. Speaking on the claim, Alex Murage, who is the director at professional services firm PwC Kenya, stated that though cars with engine 1,500cc may be common in the state, it shouldn't be used to calculate the average import taxes as that figure the dealers arrived at should be calculated in detail.
Africans depend on used car dealers like this to buy cheap vehicles
The tax agency, through their spokesman, Paul Agonda, revealed to the press that the agency only received KSh 47.2 billion ($4.6m) in tax on all imported vehicles, which includes both the new cars and the used cars in 2016/2017, while KSh 47.4 billion totaled it in 2017/2018.
As it was finally unveiled, the KSh49 billion import tax that the Kenya used car dealers association claimed it paid on used car tax yearly is actually incorrect as only KSh 47.4 billion tax was collected as of 2017/2018 for both new and used cars.
It seems our neighbors really know how to spend their money
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