Car importers feel heat of new registration policy

The state’s requirement to allocate registration number plates to used cars prior to customs clearance rather than when they are sold has led to a backlog of 6,000 used vehicles at various Container Shipping Terminals (CFS) in Mombasa.

Kenya Motor Vehicle Importers Association president Peter Otieno says the rule has put importers at a disadvantage because it takes many months for their cars to be sold in a market where buyers prefer cars with plates.

This, they said, forced them to sell their cars at lower prices or offer discounts of 50,000 to 200,000 shillings per unit on those that may not be older but were imported earlier, and do not have the latest number plates.

Car buyers in Kenya tend to like newly registered vehicles with some requests for special numbers such as 001, 007, 010, 111, 222, 333, 555, 777, 999 and 786.

“This system is unfair to our members due to the fact that customers do not buy cars but new number plates, and therefore registered number plates that are one month or more old are considered old vehicles,” Mr. Otieno said in a recent letter. to the Kenya Revenue Authority.

Mr. Otieno wants to launch the vehicles in the showroom from the container shipping stations without prior registration.

He says that if the rule is abolished, a dealer who used to import 50 units a month will now import 75 to 125 units, a move that would also raise taxes on used cars.

He said that the import of cars has also decreased due to the wrong formula for depreciation at 20 percent, 25 percent and 30 percent, but when taxing, the rates applied are 25 percent and 30 percent respectively.

Prior to 2009, second-car importers were allowed to clear imported used cars from the customs area without number plates as long as they had Kenya Garage number plates.

However, the arrangement was withdrawn against Ciak members but was left intact to franchise dealers for new, imported cars.

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