NAIROBI, Kenya- In a significant move, the Kenya Revenue Authority (KRA) has announced a transition from the Current Retail Selling Price (CRSP) method to the Transaction Value approach for valuing used motor vehicles.
This shift aligns with the court ruling of petition 190 of 2018, Article 47 of the Constitution, and the WTO General Agreement on Tariffs and Trade (GATT) 1994.
The adoption of the Transaction Value method marks a notable change in how vehicle values are assessed.
Unlike the CRSP method, which uses a standardized retail price, the new approach will consider the actual price paid or payable for a vehicle.
This aims to provide a fairer and more accurate reflection of a vehicle’s market value, potentially affecting the duties and taxes paid by importers.
KRA is committed to transparency and inclusivity in this transition. The agency is actively seeking public feedback on the proposed change, inviting comments until August 31, 2024.
Submissions can be made to the Commissioner for Customs & Border Control via mail at P.O. Box 48240-00100, Nairobi, or through email at valuation@kra.go.ke and tradefacilitation@kra.go.ke.
To ensure comprehensive stakeholder involvement, KRA has scheduled physical engagements with member associations of used motor vehicles in Mombasa and Nairobi during September and October.
These sessions aim to address any concerns and provide detailed insights into the new valuation method.
The switch to the Transaction Value approach has several implications for Kenyan importers, consumers, and the broader automotive market.
Valuing vehicles based on the actual transaction price, rather than a standardized retail price, could lead to more precise tax assessments.
This change might result in lower or higher duties and taxes, depending on the specific details of each transaction. The new method aims to align Kenya’s vehicle valuation practices with international standards, promoting fairness and transparency in tax assessments.
