Motor Dealers Protest Increase of Import Duty to 35 Percent

Car importers have objected to the decision to raise the import duty on motor vehicles to 35%, claiming the higher rates were enacted without public participation.

Car Importers Association of Kenya chairman Peter Otieno said implementation of the 35 percent import duty on Kenyan car buyers must be halted because industry players were not consulted before implementation, which is against the Constitution.

“What we mean to say is that no public participation was conducted and we cannot accept these amendments whether they have been done through Kenya or East African Community,” said Mr Otieno in a letter to the Kenya Revenue Authority (KRA).

According to Otieno, the new import tax requires car importers to increase their sale prices by between Sh50,000 and Sh100,000 for small models and by more than Sh500,000 for petrol guzzlers in order to account for the tax while selling their cars.

“We believe that the Constitution is supreme and the public participation was necessary as the Constitution so dictates that anything touching on the livelihood of the other, the involvement of key stakeholders is paramount.”

After Kenya’s appeal to increase tax under the single external tariff was approved by the East African Community (EAC), Kenyan car buyers were slammed with a 35 percent import fee at the beginning of this month.

As a result of the EAC Council of Ministers’ decision, the import tariff was increased from 25% to 35% as of July 1.

In order to support tax policies used by the William Ruto administration to earn an additional Sh211 billion in revenue this fiscal year, Kenya requested that higher taxes on household appliances like mobile phones and televisions be maintained for an additional year.