The business of importing used cars into Kenya is facing its biggest shake-up in years—and not in a good way.

Starting July 1, the Kenya Revenue Authority (KRA) plans to implement a revised motor vehicle valuation system that could more than double the taxes paid on some popular models like the Suzuki Swift, Toyota Vitz, and Mazda Demio.

But even before the changes take effect, the Car Importers Association of Kenya (CIAK) is pushing back—through the courts.

In a petition filed at the High Court in Mombasa, CIAK argues that KRA rushed through the changes without any meaningful consultation with stakeholders. The group, which represents 75 used car importers, accuses KRA of violating constitutional principles of transparency, public participation, and fair administrative action.

What’s Changing, and Why It Matters

At the centre of the dispute is the Current Retail Selling Price (CRSP)—a benchmark that determines how much tax is levied on imported cars. It affects multiple levies including import duty, excise tax, VAT, IDF, and RDL.

KRA recently revised the CRSP upward, meaning the base value for tax calculation has been inflated. And because used car taxes are applied before depreciation, any upward adjustment disproportionately raises the tax burden.

CIAK claims this will:

• Make cars unaffordable for low- and middle-income buyers.

• Widen economic inequality, by making mobility a luxury.

• Favor brand-new car dealers (many of whom are multinationals) at the expense of local used car businesses.

Legal and Economic Ramifications

CIAK’s legal team argues that this isn’t just a policy issue—it’s a constitutional one. By failing to involve stakeholders in the process, KRA is accused of violating:

• Article 10 of the Constitution (public participation and transparency)

• The Fair Administrative Action Act

• A previous 2019 court order that required KRA to reform the CRSP process with public input.

The omission of several vehicle models from the new CRSP list has also raised alarms. According to CIAK, this omission gives customs officers too much discretion in assigning arbitrary values—opening the door to unpredictability and potential corruption at ports of entry.

A Threat to Small Businesses and Green Innovation?

The petition also claims that the new CRSP rules unfairly penalize hybrid and low-emission vehicles, by assigning them higher taxable values than less-efficient petrol models. This not only contradicts Kenya’s climate goals, but also puts innovative and eco-friendly options out of reach for budget-conscious consumers.

Additionally, new car dealers—direct competitors of CIAK members—stand to benefit from the new valuation method, as it nudges customers away from used imports and toward costlier new units.

What’s Next?

The case will be mentioned in court on June 30, just one day before the changes take effect. CIAK is seeking conservatory orders to stop the rollout and is asking the court to direct KRA to adopt internationally recognized valuation methods, including those outlined under the World Trade Organization (WTO) and East African Community Customs Management Act.

The Bottom Line for Business

Whether you’re an auto importer, logistics provider, financier, or even a car buyer—this case is a wake-up call. Sudden tax changes without stakeholder input not only damage market stability but also undermine trust in regulatory systems.

As Kenya positions itself as a regional logistics and trade hub, policy shifts like these must balance revenue goals with fairness, innovation, and inclusivity—or risk stalling an entire sector of economic activity.