New KRA Law on Car Import Taxes: What Changes July 1, 2025

Starting July 1, 2025, the Kenya Revenue Authority (KRA) will implement a new law that significantly changes how import taxes on used vehicles are calculated. This update involves a revised Current Retail Selling Price (CRSP) schedule, which directly affects the taxable value of imported cars. The new CRSP aims to better reflect actual market prices, ensuring fair taxation and closing revenue gaps. However, it also means higher import taxes for many car buyers and importers in Kenya.

This article explains the new KRA law, its impact on car import taxes, and what you should do to prepare.

🏛️ What Is the New KRA Law About?

The Current Retail Selling Price (CRSP) is a valuation list used by KRA to determine the taxable value of imported vehicles. It sets benchmark prices for different car models and years, which customs officials use to calculate import duty, excise duty, VAT, and other taxes.

Previously, the CRSP was based on fixed retail prices that often did not match actual market values, leading to disputes and legal challenges. The new law introduces an updated CRSP schedule effective from July 1, 2025, replacing the old fixed prices with a more accurate list that reflects real market prices and exchange rates.

This change aims to:

• Align vehicle valuations with current market realities
• Address legal concerns over the previous valuation method
• Ensure consistent and fair taxation across all imported vehicles

💰 How Does the New CRSP Affect Import Taxes on Used Cars?

Import taxes in Kenya are calculated cumulatively based on the vehicle’s declared value or the CRSP, whichever is higher. The main tax components include:

Tax Component	Rate	Description
Import Duty	25-35%	Based on vehicle’s value
Excise Duty	25-35%	Depends on engine size and type
Value Added Tax (VAT)	16%	Fixed rate on cumulative value
Import Declaration Fee (IDF)	3.5%	Typically 3.5% of vehicle value
Other Levies	Variable	Including Railway Development Levy

With the new CRSP, the taxable value of many vehicles will increase, leading to higher import taxes. Some popular models like the Toyota Vitz Hybrid and Mazda CX-5 could see tax increases of up to 145%.

Additionally, the law enforces a maximum depreciation of 65% for vehicles up to 8 years old. This means that when calculating taxable value, the vehicle’s price cannot be depreciated beyond 35% of its original price, limiting how much importers can reduce their tax liability based on vehicle age.

🔍 Why Did KRA Update the CRSP?

Several reasons prompted the update:

Market Alignment

The previous CRSP list was outdated and did not reflect actual international prices, causing undervaluation or overvaluation.

Legal Compliance

Court rulings challenged the constitutionality of the old fixed prices, requiring revision.

Revenue Protection

The update helps close tax revenue gaps by ensuring vehicles are valued fairly.

Transparency

The new CRSP is based on thorough market research and stakeholder consultations, making it more transparent and defensible.

📊 What Does This Mean for Car Importers and Buyers in Kenya?

The new law brings several implications:

Higher Import Costs

Increased taxable values mean importers will pay more in duties and taxes, raising the overall cost of imported vehicles.

Model-Specific Impact

Some car models, especially hybrids and newer vehicles, will face steeper tax hikes.

Budget Adjustments

Buyers and importers need to factor in these higher taxes when planning purchases.

Market Changes

Increased costs may shift demand toward older or alternative vehicle models.

Compliance Importance

Accurate customs declarations aligned with the new CRSP are essential to avoid penalties or delays.

📋 How to Access and Use the New CRSP List

KRA has published the updated CRSP list on its official website. Importers and clearing agents should:

• Consult the CRSP list before purchasing vehicles abroad to estimate likely taxes
• Use the list to declare vehicle values accurately during customs clearance
• Verify exact model, variant, and year to find the correct CRSP value
• Utilize online calculators and tools offered by KRA or third parties to estimate import duties

Being proactive and informed will help avoid surprises and ensure smooth importation.

📈 Case Studies and Examples

These examples illustrate how the new CRSP impacts import costs and pricing strategies.

Vehicle Model	Previous Tax Estimate	New Tax Estimate	Percentage Increase	Impact Level
Toyota Vitz Hybrid F	KSH 200,000	KSH 490,000	145%	High
Mazda CX-5 20S	KSH 350,000	KSH 525,000	50%	Medium
Toyota Fielder	KSH 180,000	KSH 234,000	30%	Low
Nissan Note	KSH 160,000	KSH 224,000	40%	Medium

🎯 Conclusion

The new KRA law revising the Current Retail Selling Price for imported vehicles marks a major change in Kenya’s customs valuation and taxation system. While it promotes fairness and transparency, it also increases the cost of importing used cars, especially popular and hybrid models. Importers and buyers must