Pulse Kenya is the most followed news and entertainment platform in Kenya. It informs and engages young Kenyans around the clock and provides updates by the hour.

Pulselive Kenya

The Kenya Revenue Authority (KRA) has announced a proposed policy change in the valuation of used motor vehicles.

KRA proposes new car valuation method, here's the impact on motorists & importers | Pulselive Kenya

Denis Mwangi

In a public notice, KRA has invited citizens to participate in the transition from the Current Retail Selling Price (CRSP) method to the Transaction Value approach.

This shift aligns with the court ruling of petition 190 of 2018 and Article 47 of the Constitution, as well as the provisions of the WTO General Agreement on Tariffs and Trade (GATT) 1994.

<h3>Key Changes in Valuation Approach</h3>

KRA's move to adopt the transaction value method is intended to ensure compliance with international standards and to provide a fairer assessment of vehicle values.

The new method will use the price actually paid or payable for the vehicle rather than a standardised retail price.

This change aims to reflect more accurately the market value of used vehicles, potentially impacting the duties and taxes paid by importers.

<h3>Public Participation and Feedback</h3>

KRA is seeking public feedback on this proposed change, emphasising transparency and inclusivity in the decision-making process.

Members of the public have until August 31, 2024, to submit their comments.

Submissions can be made to the Commissioner for Customs &amp; Border Control via mail at P.O. Box 48240-00100, Nairobi, or through email at <a href="null">valuation@kra.go.ke</a> and <a href="null">tradefacilitation@kra.go.ke</a>.

<h3>Upcoming Stakeholder Engagements</h3>

In addition to collecting public comments, <a data-link-role-code="open_new_tab" href="https://www.pulselive.co.ke/news/local/kra-announces-data-clean-up-exercise-for-taxpayer-register/yjdpjw5">KRA </a>will conduct physical stakeholder engagements with member associations of used motor vehicles.

These meetings are scheduled for September and October in Mombasa and Nairobi.

The shift from the Current Retail Selling Price (CRSP) method to the transaction value approach for valuing used motor vehicles has several potential impacts on Kenyan importers, consumers, and the automotive market as a whole.

Here’s what it means for Kenyans:

The Transaction value approach bases the valuation on the actual price paid or payable for the vehicle, rather than a standardised retail price.

This could lead to more <a data-link-role-code="open_new_tab" href="https://www.pulselive.co.ke/news/local/16-taxes-and-levies-motorists-have-to-pay-in-kenya/r62dpy0">accurate tax assessments</a>, potentially lowering or increasing the amount of duty and taxes payable depending on the transaction's specifics.

READ: <a href="https://www.pulselive.co.ke/business/domestic/how-much-kra-revenue-service-assistants-raised-after-netting-30000-kenyans/dcnerx8">How much KRA assistants raised after netting 30,000 Kenyans in tax crackdown</a>

By aligning the vehicle's declared value with the actual transaction value, this method may reduce disputes between importers and the KRA over the assessed value and applicable duties.

<h3>Impact on Importers and the Market</h3>

Importers might experience changes in the overall cost of importing used vehicles.

If the transaction value is lower than the CRSP, importers could pay less in duties. Conversely, higher transaction values could result in increased tax liabilities.

This change may affect the pricing strategies of<a data-link-role-code="open_new_tab" href="https://www.pulselive.co.ke/business/things-to-consider-before-buying-a-second-hand-car-explainer/sqy0cxw"> car dealers and importers</a>, potentially leading to adjustments in the market prices of used vehicles.

It could also influence consumer choices, as some vehicles might become more affordable or expensive depending on the taxes levied.

READ: <a href="https://www.pulselive.co.ke/business/kenya-motor-industry-association-data-reveals-9-top-selling-brand-new-cars-in-kenya/62mnn38">9 most popular 'zero mileage' cars in Kenya and their prices</a>

<h3>Encouragement of Honest Transactions</h3>

The focus on the actual transaction value might discourage the practice of undervaluing vehicles to pay lower taxes, promoting more honest and transparent transactions within the industry.

In summary, the shift to the transaction value approach could lead to a more equitable and transparent tax system for used vehicle imports in Kenya.

It promises a more accurate reflection of market conditions, potentially benefiting both the government and consumers.

However, the real impact will depend on the effective implementation and monitoring of the new valuation method.

KRA proposes new car valuation method, here's the impact on motorists & importers

Business

lifestyle

Entertainment

News

Politics

Local

World

Celebrities

Music

Movies

Sports 

Fashion

Beauty & Health

Relationships & Weddings

Food & Travel

Lifestyle

Domestic

International 

Explore categories

The Pulse Influencer Awards has been set up to recognize and highlight bright lights in the influencer space in Kenya who are building active engaged communities around their niche or craft.

Influencer Awards

Company Pages

Breaking News & Top Stories | Pulselive Kenya

Pulse Kenya

Video

Checkout our authors for the latest content across entertainment, sports, business and more. Be first to receive exclusive updates with your free subscription straight to your phone | Pulselive Kenya

Authors | Pulselive Kenya

| Pulselive Kenya

Read the latest news across entertainment, sports, business and more. Be first to receive exclusive updates with your free subscription straight to your phone | Pulselive Kenya

Search for the latest content across entertainment, sports, business and more. Be first to receive exclusive updates with your free subscription straight to your phone | Pulselive Kenya

Search Results | Pulselive Kenya

Watch the latest videos across entertainment, sports, business and more. Be first to receive exclusive updates with your free subscription straight to your phone| Pulselive Kenya