Nobody likes paying taxes. If we had our own way, we wouldn’t be paying any. But we have to. They keep the government coffers well greased allowing us to afford Chinese contractors to build almost-perfect roads and soon-to-be railroads.

While we wait for the standard gauge railway, I’ll let you in on how the KRA determines how much you’ll pay as duty for your car import. For a long time, it has been a trade secret for the KRA and Clearing and Forwarding agents but today I decided to let the whole world know. Call it being philanthropic with valuable information.

Three rules apply when determining import duty:

1. Engine Capacity

Simply put, “The bigger the engine, the higher the duty.” With all other factors nullified and for the purpose of clarity to the point I wish to put across, a Range Rover Sports HSE with a 4,400cc will attract a higher duty than a 1,000cc Toyota Vitz.

I might be crucified for comparing a luxury sport utility vehicle but a worthy risk to get my point across.

2. Current Retail Selling Price (CRSP)

After every six months, The Kenya Revenue Authority publishes on its website the values to be used by Clearing and Forwarding agents and their officials in charging or calculating duties. Here’s the latest one http://www.revenue.go.ke/notices/pdf2013/NEW%20CRSP%20EFFECTIVE%2015th%20APRIL%202013-Latest.xls

The list indicates various makes, models and their CRSP. What you paid for your import (CIF) does not come into play since CRSP forms the basis of import duty.

Importing a new (2013) model in 2013 would mean that import duty is charged at 25% CRSP. For older cars, the CRSP gets discounted by 10% per year until the maximum of eight years.

3. Age of Registration

Significant difference lies in the Year of Manufacture and Car Registration Date. While the ‘Year of Manf’ is used to enforce the 8-year-maximum rule for Kenya car imports, duty is calculated on the registration age of the car i.e. when it was officially allowed on the roads of its country of origin.

You need to make sure that the registration age of the car is over seven years to benefit from full depreciation of CRSP.

I’m grabbing Picasso’s brush to paint the picture for you. Walk with me to the canvas.

It’s September, you are importing a vehicle that was first registered in Japan in November 2006. Your car arrives in October; you will pay duty at the rate of 60% depreciation since the car hasn’t reached registration age of seven years allowing you the 70% discount.