Crackdown nets Sh64m price of unlawful international vehicles

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Economic system

Crackdown nets Sh64m price of unlawful international vehicles


Second hand vehicles being offloaded from a Cargo Ship on the Port of Mombasa. FILE PHOTO | NMG

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Abstract

  • The taxman multi-agency findings present the worth of motor automobiles seized jumped from Sh400,000 the earlier quarter after President Uhuru Kenyatta ordered a crackdown on unlawful use of international quantity plates.
  • Kenya’s strict age limits on automotive imports and excessive import taxes has made transport automobiles into the nation costly, making a profitable backdoor marketplace for vehicles meant to be transshipped to regional neighbours.
  • The KRA additionally recorded greater interceptions of unlawful cigarettes, cell phones, clothes and petroleum merchandise.

The Kenya Income Authority (KRA) seized vehicles price Sh64.5 million within the crackdown on automobiles with international quantity plates within the three months to March, pushing the worth of unlawful items confiscated within the interval to March to Sh570.7 million.

The taxman multi-agency findings present the worth of motor automobiles seized jumped from Sh400,000 the earlier quarter after President Uhuru Kenyatta ordered a crackdown on unlawful use of international quantity plates.

Kenya’s strict age limits on automotive imports and excessive import taxes has made transport automobiles into the nation costly, making a profitable backdoor marketplace for vehicles meant to be transshipped to regional neighbours.

The KRA additionally recorded greater interceptions of unlawful cigarettes, cell phones, clothes and petroleum merchandise.

“Quarter three which begins in January kicked off on a excessive notice following a crackdown on motorists illegally utilizing automobiles with international quantity plates. The crackdown was performed on twelfth January and thirteenth January 2022 in collaboration with different companies thus a rise within the variety of motor automobiles seized,” KRA mentioned.

Kenya which presently solely permits the importation of automobiles as much as eight years, has the strictest regime on the age restrict of used vehicles within the area.

Tanzania permits imports of vehicles as outdated as 10 years whereas Burundi, Rwanda and South Sudan, however, haven’t any formal age limits for used vehicles.

It was solely in 2018 that Uganda handed a regulation limiting importation of automobiles manufactured greater than 15 years earlier.

Uganda Income Authority (URA) on April 1, 2022, introduced that efficient July 1, 2022, there shall be a non-clearance of motor automobiles of 9 years and above below the warehousing regime.

The completely different set of age limits inside the area has fuelled tax and regulatory arbitrage to ship in cheaper and older vehicles.

Many Kenyans are reportedly concerned in a tax and regulatory arbitrage to ship in cheaper and older vehicles.

A lot of the used vehicles coming from Uganda, although cheaper, are a lot older than these within the Kenyan used automotive market due to Kampala’s extra relaxed age restrict on its imported second-hand automobiles.

This suggests that one can ship in a a lot older automotive by way of Uganda, declare low customized worth and pay a lot decrease taxes in comparison with direct importation into Kenya the place used vehicles aged greater than eight years can’t be allowed in.

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