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Car importers sue KRA over new charges that raised cost of cars by 50%

Car importers have challenged a method used to calculate the import duty payable on used vehicles.

Presently, Kenya Revenue Authority (KRA) is using a revised Current Retail Selling Price (CRSP), which became effective on February 5.

According to the Car Importers Association, which has filed the petition at the High Court in Mombasa, KRA may alter the CRSP values on its website or public portal published in September last year only after complying with the law regarding public participation.

MORE THAN 50%

The association said the published CRSP has led to an increase in the values of used cars by more than 50 per cent.

The importers want the current CRSP values for used imported vehicles declared null and void for lack of public involvement.

The petitioner also states that its members have always paid a CRSP value of Sh14.4 million for a Toyota Land Cruiser V8, but KRA is now demanding Sh17.9 million for the vehicle from one of its members.

They say the continued holding of the vehicle while the importer has paid the required duty is a violation of his rights.

“The respondents (KRA) did not invite any stakeholders in the car importation industry to make their proposals before arriving at the new values,” says the petitioner.

OPPRESSIVE AND UNREASONABLE

Through lawyer Gikandi Ngibuini, the importers termed the values oppressive and unreasonable, which denies them profits.

“We risk closing down car importation businesses and loss of livelihoods by car importers,” the petition states.

The importers further argue that there is a threat of violation of car importers’ right to economic well-being and the right to earn a living due to unreasonable CRSP value imposed by KRA.

The importers say that on January 30, they wrote a letter to KRA to suspend the new CRSP pending deliberations, but the agency never responded.

“Even though in the stakeholders’ meetings KRA were directed to hold meetings with the association so as to resolve the CRSP issues, it has always been reluctant to do so,” the petition further states.

The petitioner accuses KRA of violating provisions of the Constitution in the manner in which it came up with the revised CRSP values.

The case will be mentioned on Monday next week.