Motor Vehicle Importation
Overview
Regulatory Compliance: Customs & Border Control Department not only complies with regulatory requirements, such as those set by the Kenya Bureau of Standards (KEBS), to protect the environment and ensure road safety, but also contributes significantly to the country's revenue through the collection of duties and levies.
Key Facts & Figures about Motor Vehicle Imporation
1. Vehicle Import Volume:
- Annual Import Data: Kenya imports approximately 70,000 to 80,000 vehicles annually. This includes both new and used motor vehicles.
- Motor Vehicles: About 80% of the vehicles imported into Kenya are used vehicles, reflecting a significant demand for pre-owned cars in the local market.
2. Regulatory Compliance:
- Vehicle Age Limit: Used motor vehicles imported into Kenya must not be more than 8 years old from the year of manufacture or the first date of registration. This requirement is aimed at ensuring vehicle safety and minimizing environmental effect.
Important Dates
1. Legal Notice No. 78:
- Effective Date: 15th July 2005. This legal notice outlines the Verification of Conformity to Kenya Standards which sets the regulatory framework for vehicle compliance.
2. Regulatory Changes:
-Periodic Updates: Regulations and tax rates are subject to periodic updates, often brought about by the changes in tax policies entailed in the annual Finance Acts, or through gazette/legal notices by the Government of Kenya and East African Community Council of Ministers. It is important for taxpayers to stay informed about any changes that could affect the importation and clearance of used motor vehicles.
3. Customs Clearance Deadlines:
-Clearance Process: Imported vehicles must be cleared through Customs within 21 days of arrival at the port of discharge. Failure to clear within this prescribed period may result in accrued Customs warehouse rent, pursuant to Section 34 (i) of the East African Community Customs Management Act (EACCMA) 2004.
Misconceptions and Clarifications on Motor Vehicle Importation
Clarification: This is incorrect. Kenya has strict regulations that require used/imported vehicles to be no more than 8 years old from the year of manufacture or date of first registration.
Misconception 2: "I can clear my vehicle through Customs without a Pre-shipment Inspection Certificate."
Clarification: All used vehicles must undergo a roadworthiness inspection by a KEBS-appointed inspection agent in the country of export and obtain a Pre-shipment Inspection Certificate. This document is essential for confirming that the vehicle meets the required safety and compliance standards.
Misconception 3: "Import Duty is the only tax payable for vehicle imports."
Clarification: In addition to Import Duty which varies based on the Harmonized Standard (HS) classification of the vehicle, other taxes and levies include Excise Duty, VAT, Import Declaration Fees, and Railway Development Levy at prescribed rates. All these duties and levies must be paid prior to Customs clearance unless the motor vehicles are under exemption or provisional release. To secure taxes for motor vehicles under provisional release, a particular security bond (CB1) is executed, equivalent to the taxes payable.
Misconception 4: "Customs agents are optional for vehicle importation."
Clarification: Engaging a licensed Customs agent is mandatory for processing import declarations through the KRA system, the online Integrated Customs Management Systems (iCMS). Customs agents handle the submission of import entries, clearance logistics, and provision of documents for Customs formalities.
Step-by-Step Process of Motor Vehicle Importation
1. Pre-importation Checks
- Ensure Compliance: Verify that the vehicle meets the Kenya Bureau of Standards (KEBS) requirements, including adherence to Legal Notice No. 78 of 15th July 2005 and KS1515:2000.
- Verify Vehicle Age: Confirm the vehicle is not more than 8 years old from the year of manufacture or date of first registration.
- Check Vehicle Type: Ensure the vehicle is Right-Hand Drive (RHD).
2. Inspection and Documentation
- Roadworthiness Inspection: Have the vehicle inspected by a KEBS-appointed inspection agent in the country of export. Obtain a Pre-shipment Inspection Certificate.
- Gather Documents: Prepare the following documents:
- Original Commercial Invoice
- Original Logbook from the country of importation that has been cancelled from the country of origin, as this will be required by the National Transport and Safety Authority to give you an original Kenyan Log Book.
- Original Bill of Lading
- Pre-shipment Inspection Certificate
- Copy of your KRA Personal Identification Number (PIN) certificate or Certificate of Incorporation (for companies).
3. Engage a Licensed Customs Agent
- Choose a Licensed Customs Agent: Select a licensed Customs agent from the list provided by Kenya Revenue Authority (KRA) as found on the KRA website.
- Submit Import Entry: The Customs agent will submit the import entry in the KRA system through the Integrated Customs Management Systems (iCMS), pay the requisite duties and levies, and provide all required documents for Customs clearance.
- Direct Payment to the Tax Authority: Importers should make their tax payments directly to KRA rather than relying on intermediaries to avoid risks associated with misused funds or false documentation.
- Verification of Motor Vehicle and the necessary documentation: This is undertaken by all relevant Partner Government Agencies before release.
- Importance of Accurate Tariff Classification: Ensure use of the correct tariff classification as using incorrect tariffs can lead to significant tax evasion and financial liabilities. Customs may, on application, issue an advance ruling on applicable values, tariff classification, and rules of origin.
4. Post-Customs Clearance Procedures
- Receive Kenyan Logbook: After Customs clearance, the importer or his agent applies to the National Transport and Safety Authority (NTSA) for issuance of registration certificate (log book) once the Customs processes are concluded.
Frequently Asked Qestions on Motor Vehicle Importation
A: Before importing a vehicle into Kenya, ensure the vehicle meets the Kenya Bureau of Standards (KEBS) requirements, including adherence to Legal Notice No. 78 of 15th July 2005 and the KS1515:2000 standard. Confirm that the vehicle is not more than 8 years old from the year of manufacture or date of first registration and that it is a Right-Hand Drive (RHD) vehicle.
Q: How do I find and use a Customs agent for vehicle clearance?
A: Choose a licensed customs agent from the list provided by the Kenya Revenue Authority (KRA). The list is on the KRA Website under Customs agents.
Q: What steps should I follow for Customs clearance of my vehicle?
A: To clear your vehicle through Customs, you must provide all required documentation to your clearing agent who will then submit the documents to Customs in iCMS. You must ensure payment of all requisite taxes and duties.
Q: What should I do after clearing my vehicle through customs?
A: After Customs clearance, you will need to obtain a Kenyan Logbook from the National Transport and Safety Authority (NTSA).
Q: What taxes and duties will I need to pay when importing a vehicle?
A: The applicable duties and levies include:
• Import Duty
• Excise Duty
• Value Added Tax (VAT)
• Import Declaration Fees
• Railway Development Levy
• Motor Vehicles Registration Fees
Note:
• People with disabilities can import motor vehicles duty-free, provided they comply with the requirements of the Fifth Schedule to the EACCMA, 2004.
• Ambulances and hearses are exempt from import duty.
Support Information
https://www.kra.go.ke/individual/importing/learn-about-importation/procedures-for-motor-vehicle
Motor Vehicle Valuation Template:
https://kra.go.ke/images/publications/NEW-Motor-Vehicle-Valuation-Template--Effective--1st-July-2023-final.xls
List of Clearing Agents:
https://kra.go.ke/images/publications/List-of-Custom-Agents-2023.pdf
Contact Information:
Customs enquiries: helpdesk.customs@kra.go.ke
Customs Complaints: complaintscbc@kra.go.ke
Telephone Contact: 0709012055, 0709013521
