Kenya’s used vehicle dealers protest

Nairobi. Kenya’s used car dealers have sounded the alarm over the growing importation into the local market of Uganda-registered vehicles whose quality is not known and for which no taxes have been paid.

Many Kenyans are reportedly now involved in a tax and regulatory arbitrage to ship in cheaper and older cars. Most of the used cars coming from Uganda, though cheaper, are much older than those in the Kenyan used car market because Kampala has not put an age limit on imported second-hand automobiles.

This implies that one can ship in a much older car through Uganda, declare low custom value and pay much lower taxes compared to direct importation into Kenya where used cars aged more than eight years cannot be allowed in.

“We wish to alert you of the large number of Uganda-registered vehicles operating in Kenya, specifically Western Kenya,” the secretary-general of the Kenya Auto Bazaar, Charles Munyori, wrote to Kenya Revenue Authority (KRA) Commissioner-General John Njiraini in a letter seen by the Business Daily.

“We have also noted that people have started buying and selling them locally while bearing the Uganda registration plates, meaning no taxes are paid.”

Mr Munyori further said that most of the vehicles do not meet the quality standards set by the Kenya Bureau of Standards (Kebs), urging the taxman to investigate how the cars are able to be sold and operate locally without paying the necessary taxes. The KRA says it continues to implement strict surveillance on all cars, whether in transit or imported on a temporary basis.

The taxman, however, could not say how many Uganda-registered cars are currently operating in Kenya.