With the new finance bill signed into law on the 07.11.2019 this brought a rise in import taxes on certain vehicles and a lowering of tax on 100% electric vehicles being shipped into Kenya. We explain the Kenya Vehicle Import Tax changes that have happened in this article.
Tax Bracket 1
For Vehicles whose engine capacity is less then 1,500 CC the following taxes apply, effectively this is the only band whose taxes are unaffected.
Import Duty: 25%
Excise Duty: 20%
VAT: 16%
RDL: 2% (This is an increase on all imports into Kenya)
IDF: 3.5% (This is an increase on all imports into Kenya)
Plus Vehicle Registration and Clearance Costs
Tax Bracket 2
Petrol: Engine Capacity Exceeding 1,500 cc but less than 3,000 cc
Diesel: Engine Capacity Exceeding 1,500 cc but less than 2,500 cc
Import Duty: 25%
Excise Duty: 25%
VAT: 16%
RDL: 2% (This is an increase on all imports into Kenya)
IDF: 3.5% (This is an increase on all imports into Kenya)
Plus Vehicle Registration and Clearance Costs
Tax Bracket 3
Petrol: Engine Capacity Exceeding 3,000 cc
Diesel: Engine Capacity Exceeding 2,500 cc
Import Duty: 25%
Excise Duty: 35%
VAT: 16%
RDL: 2% (This is an increase on all imports into Kenya)
IDF: 3.5% (This is an increase on all imports into Kenya)
Plus Vehicle Registration and Clearance Costs
Tax Bracket 4
Finally, for 100% electric vehicles the taxes applicable are as follows.
Import Duty: 25%
Excise Duty: 10%
VAT: 16%
RDL: 2% (This is an increase on all imports into Kenya)
IDF: 3.5% (This is an increase on all imports into Kenya)
Plus Vehicle Registration and Clearance Costs
How Are Taxes Calculated?
KRA have a customs value which is a benchmark they use to determine the minimum value applicable for an Imported Motor Vehicle, should your value be higher then the bench-marked value then your value would apply.
An Example of a Vehicle Import Tax Calculation into Kenya
Let say you are Shipping or Importing a February 2012 Toyota Hilux 3.0 Invincible Automatic which arrives into Kenya in November 2019.
KRA Value: KES 757,356.00
Based on the above value holding true, this falls into Tax Bracket 3 based on the above hence below taxes would apply:
Import Duty:
25% of KRA Value
Tax Payable: KES 186,839.00
Excise Duty:
35% of KRA Value + Import Duty Tax Amount
Therefore 35% x (757,356 + 186,839)
Tax Payable: KES 326,968.00
VAT:
16% of KRA Value + Import Duty Tax Amount + Excise Duty Tax Amount
Therefore 16% x (757,356 + 186,839 + 326,968)
Tax Payable: KES 201,786.00
RDL:
2% x KRA Value = 14,947.00
IDF:
3.5% x KRA Value = 26,157.00
Giving a Total Tax of KES 756,698.00 plus vehicle registration and clearing costs.
We are in the process of updating our Kenya Import Vehicle Tax calculator, in the meantime feel free to reach out to us should you have any clarification needed on how taxes are calculated.