Importing a car to Kenya through Mombasa

Having bought a car overseas in Japan or another market, and organized shipping to Mombasa, you’re now ready to clear your car through the port and get motoring in Kenya.

Depending on your courage, contacts and stamina, a key decision is whether you will deal with KRA and the Port yourself, or pay for the services of a clearing agent. Our advice is that you choose the latter!

The KRA published a list of licensed Clearance Agents on its website here: http://www.kra.go.ke/customs/pdf/THE_LICENSED_CUSTOMS_CLEARING_AGENTS_FOR_THE_YEAR_2007.pdf

Please note that this list of 800-odd clearance agents has not been updated since 2007 but most of them are still in business.

You’ll need to do a bit of research to find clearing agents with good expertise and connectivity in the Port but this is not too difficult a process and for the KShs10-15,000/- cost per car, it is generally recognized as money very well spent.

Once organized, you’ll need to ensure they receive all of the import and sales documents you received from either the auction in Japan, the Japanese dealer, or if you’re purchased the vehicle yourself in another market, you’ll need all the paperwork. Before you hand it all over to a clearing agent, make sure take a couple of sets of good quality colour copies before you do so just in case documents go missing.



Clearance Costs and Charges

The following charges are applicable when bringing a car into Kenya:

Import Declaration Fee: This fee goes to the Kenya Ports Authority and starts the process of clearing your car. It is normally around the KShs 5,000/- mark and takes a few days to process to have your import ‘Declared’ which starts the process of KRA and Customs clearance. It is officially calculated as 2.25% of the CIF value of the car, or KShs. 5,000/- whichever is higher. For most cars this means KShs. 5,000/-

Delivery Order Fee: This is also about KShs. 5,000/- and goes to the Port Authority.

KRA Fees: The KRA charges the sum of four different fees / duty which are:
  1. Import Duty
  2. Excise Duty
  3. Value Added Tax (VAT): 16% of the sum of Import Duty + Excise Duty
  4. IDF (explained above)
Registration: This fee is around KShs15,000/- for a standard car and is best thought of as the fee for getting number plates. The number plates are made in a nearby prison and from time to time there are delays and holdups in this which can drive up storage charges – its worth keeping an eye on the press as they often run this story when it occurs – there is not a lot you can do about it when there is a shortage of number plates.



Kenya Car Import Duty

Kenya Import Duty for cars has rightly been seen as a bit of a dark art in Kenyan car importing, but once you work through the different variables, it is not as complicated as it initially looks. It is definitely worth being aware of two or three common pitfalls or traps when it comes to Kenya Car Import Duty.

There are two components to the duty:
  1. Import Duty: 25% of the CRSP ‘CIF Value’
  2. Excise Duty: 20% of the sum of the CRSP ‘CIF Value’ and Import Duty calculated above
You then pay VAT at 16% on the total.

There are four key factors that are used to calculate the Import Duty.


1. The CRSP (Current Retail Selling Price) CIF Value

Every six months, the Kenya Revenue Authority releases a new price list on http://www.kra.gov.ke that lists the common makes and models and a recommended retail price. It is this price that forms the basis of import duty, not the price you paid for the car at auction or anywhere else. This price reflects KRA’s view of theprice when the vehicle was new.

The most recent list in January 2011 is available at http://www.kra.go.ke/notices/pdf2011/CRSP-JAN-2011.xls

For a new car, the KRA charges duty at 25% of the CRSP. For older cars, the CRSP gets discounted by 10% per year. Please see below how the KRA uses the CRSP to calculate duty, discounted for the age of the car.


2. The Engine Size

The KRA levies duty on engine size – the bigger the engine, the greater the duty. This reflects the cost / value to the Kenyan economy of cars with greater engine capacity which acts as a proxy for higher fuel consumption. Generally anything under 2000cc is the car to aim for if you’re looking to really optimize your buying power. Our friends over at http://www.motogari.co.ke have put together a great calculator that helps you navigate this aspect: http://motogari.co.ke/2010/07/guest-post-vehicle-import-duty/


3. The Manufacturing Age of the Car

For every year since the original new manufactured date on which the CRSP is based, the price gets discounted 10% up until the 8 year mark where you get a 70% discount on the price for
duty calculations. It is illegal to import a car over 8 years old.

For a car made this year, if the CRSP price is $10,000, then last year’s car is worth $9,000 for duty calculations and the year before that $8,000 and so on, back to the car seven years ago
which is worth $3,000.

As the duty rate is 25%, you pay that duty on the discounted CRSP. Using the numbers above, for a brand new car, the duty component is $2,500 and for the 7.5 year old car, its $750

This is why nearly all the Kenya cars for sale on Cheki are seven years old – Kenyan car dealers aim for the cheapest Japan cars at the lowest duty in order to sell the most competitively priced cars. It is also why there is a big price drop in Kenya cars for sale after the 7 year mark – they’re the cars that the dealers couldn’t shift last year. It is also why buying a seven-year-old car for import in Late November/ December is quite risky and buying an 8 year old car in January is cheaper than the month before.


4. The Registration Age of the Car

Often a car manufacture date and a car registration date will be different. The first reflects the date the car left the factory, whereas the second is the time that the car became street legal in its country of origin.

There is a difference, and that difference can cost you 10% in duty.

The manufacture age is the age that drives the rule’ no cars over 8 years old’. ie if the manufacturing age is 7 years and 11 months that fits within the limits.



The duty is calculated from the registration age

A common pitfall is to import say a 2005 car in July, which was registered first in September 2005. This car will attract 10% more duty in July when of a given year than it will in October.

Another common pitfall is to aim for a car aged just under the 8 years limit. Quite often the Port Authorities may experience a delay – the manufacture of number plates or something bureaucratic or some part of your paperwork that has a typing error. Such a delay can tip your car over the 8-year mark which renders it illegal for import. Stories have been heard over the years where individual officials in the port use these delays and their consequences to edge your car closer to illegality in order to try to negotiate alternative arrangements for speeding up bureaucratic processes or overlooking of minor errors in paperwork.



Mombasa Port, Storage and Demurrage charges

The longer the stay, the higher the charges and they are expensive, starting at KShs. 3000/- per day and up. These are to be avoided at all costs if you can.

Small bureaucratic delays can extrapolate quickly into a three month delay as mentioned above – that’s KShs 300,000/- for starters – it can prove very expensive indeed – particularly when there is a clear reason such as a delay that results in overstaying the 8 year limit when bringing in a 7 year old car.

In fact, a visit to the port will tell you that some importers literally abandon the cars at the port once delays mean that the cost of demurrage and storage exceeds the value of the car or its margin itself.

It’s therefore important to start the clearing process the day the ship arrives.

You can also see why some people endeavor to discount these sorts of figures by 90% to try work out some unofficial means of getting around bureaucratic hurdles.

Our advice is to make sure your paperwork and compliance with KRA duties, age limits and other requirements are rigorously adhered to. There are no low risk short cuts through the ports these days and our advice is to ensure everything is fully in order before approaching car importing.



Duty Free Cars in Kenya

Under certain circumstances it is possible to avoid all of this and import a car duty free.

The broad categories are expatriates and investors, UN / Diplomatic staff and Kenyan returning residents.

For expatriates and investors, you’ll need a valid work permit, and you’ll need to have owned the car in its original country for 12 months prior to its landing, and be able to prove it. You have a three month window from the granting of your work permit to import the car.

For UN and Diplomatic staff, you’ll also need a valid work permit / accreditation papers from the Ministries of Finance, Foreign Affairs or Immigration depending on your status and the agency. You also need to import your car within a three-month window of being posted to Kenya.

For Kenyan residents and citizens who have lived overseas continuously, as an incentive to have Kenyans return to build the nation, you are allowed to import duty free one motor vehicle (excluding buses and mini buses) into the country subject to the following conditions:

  • You must have resided outside Kenya for at least two years during which period you should not have visited Kenya for an aggregate of more than 90 days.
  • You must have personally owned and used the motor vehicle for at least twelve months.
  • The motor vehicle must not be older than 8 years.
  • You must have attained the age of eighteen years.
  • You must not have been granted a similar exemption previously.

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