KENYA : Buying a car is an exciting milestone, but it’s also a complex process that requires careful planning, especially when importing one from abroad. Planning for all the taxes, fees, and incidental costs that come with the process is essential so you aren’t blindsided.

A Subaru Forester enthusiast bid in an auction in Japan and got the Car at approximately Ksh 1,008,000.

However, that was just the beginning. By the time the car landed at the Mombasa port, cleared customs, and got registered, the total cost had ballooned to over Ksh3,000,000.

Here are all the taxes and fees paid during the process :

Import Duty.

Import duty is a tax levied by the government on cars brought into the country. The import duty is applied to the customs value of the vehicle, which is determined based on the Current Retail Selling Price (CRSP) provided by the Kenya Revenue Authority (KRA) or the actual invoice value—whichever is higher.

The customs value of a car includes the Cost, Insurance, and Freight (CIF), essentially covering the total cost of buying the vehicle, insuring it during transport, and shipping it to the Mombasa port.

Example, someone who bought a Subaru Forester for Ksh1,008,000, after adding the marine insurance and shipping costs to Mombasa, the total comes to Ksh1,450,000. This is the customs value that the Kenya Revenue Authority uses to calculate the import duty.

The import duty is set at 35% of the customs value. Here’s a breakdown of the calculation:

Customs Value (CIF): Ksh1,450,000

Import Duty (35% of CIF):

35% of 1,450,000 = Ksh507,500

Excise Duty.

Excise Duty is a tax on specific goods and services manufactured locally or imported into the country, including cars. In Kenya, this tax is calculated as a percentage of the Excise Value, which is the sum of the car's CIF value and the import duty.

The excise duty rates are based on the vehicle’s engine capacity and age. For Example:

20% for vehicles with an engine capacity below 1,500cc

25% for vehicles with an engine capacity between 1,500cc and 3,000cc (for petrol engines) or 2,500cc (for diesel engines)

35% for vehicles with an engine capacity exceeding 3,000cc (for petrol engines) or 2,500cc (for diesel engines)

The Subaru Forester has an engine capacity of 2,000cc, so it falls into the 25% excise duty bracket.

To calculate the excise duty, you first need to determine the Excise Value:

Customs Value (CIF): Ksh1,450,000

Import Duty: Ksh507,500

Excise Value: Customs Value + Import Duty = 1,450,000 + 507,500 = Ksh1,957,500

Excise Duty is calculated at 25% of the Excise Value:

Excise Duty: 25% of 1,957,500 = Ksh489,375

Value Added Tax (VAT).

According to the KRA website, "VAT is a consumption tax imposed whenever a value is added on applicable goods and services at each stage of the supply chain from production to consumption. It is levied on the use of taxable products and services supplied or imported into Kenya."

When importing a car, you, as the consumer, must pay VAT. VAT is charged at 16% on the VAT Value, which is the sum of the CIF value, Import Duty, and Excise Duty.

To determine the VAT for an imported vehicle, you first need to calculate the VAT Value:

VAT Value = CIF Value + Import Duty + Excise Duty

For the Subaru Case:

CIF Value: Ksh1,450,000.

Import Duty: Ksh507,500.

Excise Duty: Ksh489,375.

So, the VAT Value is:

VAT Value: 1,450,000 + 507,500 + 489,375 = Ksh2,446,875.

VAT is calculated at 16% of the VAT Value:

16% of 2,446,875 = Ksh391,500

Import Declaration Fee (IDF).

The Import Declaration Fee (IDF) is a mandatory charge imposed on imported goods, including vehicles. It covers the cost of processing import declarations and ensures that all imported goods are correctly documented and accounted for.

The IDF is calculated at 2.5% of the CIF value of the vehicle.

For the imported Subaru Forester, with a CIF value of Ksh1,450,000, the calculation is as follows:

IDF: 2.5% of 1,450,000 = Ksh36,250

Thus, the Import Declaration Fee for the Subaru amounted to Ksh36,250.

Railway Development Levy (RDL).

The Railway Development Levy (RDL) is another tax applied to imported vehicles. This levy is specifically used to fund the development and maintenance of railway infrastructure in Kenya.

The RDL is charged at 1.5% of the vehicle’s CIF value.

Using the same CIF value for the Subaru Forester, which is Ksh1,450,000, the calculation is:

RDL: 1.5% of 1,450,000 = Ksh21,750

Therefore, the Railway Development Levy for the vehicle amounted to Ksh21,750.

Car Registration Costs.

Beyond the importation taxes and duties, registering your vehicle in Kenya involves additional expenses. These include obtaining Kenyan license plates and a logbook in your name.

The total cost of registering the Subaru, including the issuance of the license plates and the logbook, is Ksh30,000, which is paid to the National Transport and Safety Authority (NTSA).

This registration process ensures that the vehicle is legally recognized and documented under Kenyan law, allowing you to drive it on local roads.

Other Incidental Costs.

When importing a vehicle into Kenya, there are several additional fees beyond the primary taxes and registration costs. These incidental costs include:

KEBS Requirements (QISJ Roadworthiness Check): Before the car leaves the Japan port, it must pass the Kenya Bureau of Standards (KEBS) roadworthiness check. The cost of the inspection will typically depend on the type of car you are importing. In the Subaru case, the owner paid Ksh43,000.

Import Declaration Form (IDF): An administrative fee of Ksh2,000.

Radiation Fee: This is a mandatory fee of Ksh1,000.

Interpol Police Fee: To ensure the vehicle isn’t stolen or under any criminal scrutiny, a fee of Ksh15,000 is charged.

Port Charges (CFS): The costs associated with handling and storing the vehicle at the port amount to Ksh55,000.

Minor Repairs and Inspection Fees: To verify the vehicle’s roadworthiness, you may need to conduct minor services before you drive off. The cost will depend on the car. In my case, my car needed a few adjustments, a wash, and an oil change.

National Transport and Safety Authority (NTSA) Inspection and E-Sticker: For vehicle inspection and obtaining the e-sticker, the cost is Ksh1,750.

Agent Fees: If you use an agent to handle the importation process, this fee is Ksh62,000.

These additional costs total up to Ksh194,750, and they are necessary to ensure that the vehicle meets all regulatory requirements and is properly cleared for use on Kenyan roads.