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Car importers accuse taxman of flouting Constitution

Saturday January 19 2019

Imported second-hand cars at a yard in Nairobi.

Imported second-hand cars at a yard in Nairobi. PHOTO/ FILE | NATION 

PHILIP MUYANGA
By PHILIP MUYANGA
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Car importers have accused the Kenya Revenue Authority of flouting Constitutional provisions on public participation in coming up with a new method to calculate import duty payable on used vehicles, a court heard.

Car Importers Association of Kenya chairperson Peter Otieno told court that it has been difficult to meet KRA over the revised Current Retail Selling Price (CRSP).

Mr Otieno, who was being led in his evidence by lawyer Gikandi Ngibuini, wants the court to order KRA to engage the association in discussions over the CRSP.

CONSULTATION

“There was no consultation when KRA was coming up with the CRSP,” said Mr Otieno adding that it was only in 2017 when the taxman engaged in consultations with the association over the CRSP.

Mr Otieno, who was testifying during the hearing of a petition in which the association has sued KRA, told court that there was need to revert to the 2017 CRSP until public consultation is undertaken over the issue.

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The association claims that on January 30 last year, KRA published ‘new’ CRSP which was to be effective from February 5 last year for every model of used motor vehicles being imported in the country by car importers.

According to the association, KRA may alter CRSP values on its website or public portal published in September 2017 only after complying with the law regarding public participation.

The association argues that the published CRSP (of last year January) has led to an increase in the values of used cars by more than 50 per cent.

The importers want the CRSP values used for used imported vehicles declared null and void for lack of public involvement.

The petitioner also states that its members have always paid a CRSP value of Sh14.4 million for imported used Toyota Land Cruiser V8 but KRA has demanded Sh17.9 million for a similar vehicle being imported by one of its members.

The association is seeking declarations among them that KRA has violated the Constitution in relation to computations of the CRSP values on imported vehicles.

DETERMINATION

“The respondents (KRA) did not invite any stakeholders in the car importation industry to make their proposals in the values arrived at in the determination of the CRSP values,” said the petitioner.

The importers further argue that there is a threat of violation of car importers’ right to economic well-being and the right to earn a living due to unreasonable CRSP value imposed by KRA.

According to the importers, on January 30 last year, they wrote a letter to KRA to suspend the new CRSP pending deliberations but it has never been responded to.

“Even though in the stakeholders meetings KRA were directed to hold meetings with the association so as to resolve the CRSP issues, it (KRA) has always been reluctant,” the petition further states.

The petitioner further claim that KRA violated provisions of the Constitution in the manner in which it came up with the new CRSP values.

The association is also seeking a declaration that the CRSP values of used imported motor vehicles published by KRA which took effect on February 5 last year are null and void for want of public involvement.

Through its witness, KRA is expected to respond to allegations by the association on February 6.