Car importers push for better policies, tax relief

Used car importers have called on the government to create better laws and policies that will improve the working environment for car trade in the country.

The car dealers also want the government to be considerate on taxes imposed on imported cars, saying a review will allow more Kenyans purchase vehicles and in turn contribute towards the country’s economic growth.

Speaking during an awards ceremony organised by Dependable Brands, the car dealers asserted that the industry fetches the country more than Sh30 billion in foreign exchange annually thereby playing a crucial role in the country’s economic stability.

Led by Khalif Kairo, the CEO of Kai and Karo who won the Young CEO of the Year Under 30 and Car Dealership of the Year awards, the importers said the sector should be supported by the government with tax reliefs and other incentives.

Job creation

He noted that the industry plays a huge role in supplementing the government’s agenda on job creation by generating more than one million jobs for Kenyans.

“We are trying to recover and are thankful that the dollar has come down. Over 80 per cent of cars sold in Kenya are sold by used car dealers and we give the government at least Sh30 billion yearly in taxes and over one million people have been directly employed in the sector. The government should give us better recognition going by the role we play,” said Kairo.

Poojan Maru of Chief Imports noted with concern that the car dealing business took a dip after enactment of the 2023-2024 Finance Act which increased taxation including the import duty that was raised from 25 per cent to 35 per cent, coupled with excise duty and value added tax (VAT). He, however, averred that the traders don’t have an issue with paying taxes insisting that Kenya Revenue Authority (KRA) needs to make the taxes more sensible and also involve them as stakeholders in the sector while making crucial policies including determination of the Current Recommended Selling Price (CRSP).

“This sector is still healing from losses made due to high forex rates that saw the cost of importing cars soar. We, however, hope for better years to come and KRA should make the taxes sensible for us,” stated Maru.

Eric Mwangi of Maridady Motors who won the CEO of the year said that creation of friendlier policies for the car importers will allow them venture into new technologies including the electric vehicles (EVs) thereby contributing towards environmental conservation in the country.

He also called on the government to put in place tough measures that will enhance and maintain stability of the shilling, saying this will see the cost of cars reduced.

“We urge the government to be friendly in terms of the policies they come up with particularly for the motor dealerships. Let them be supportive of us,” said Mwangi.

Viva Motors CEO Dennis Caleb who won the Luxury Car Dealership of the Year award, reiterated that the sector has a potential to create millions of jobs especially for unemployed youths if the Government creates favourable policies and reviews taxes imposed in the sector.

Foreign exchange

Similar sentiments were echoed by Purity Kimotho of Urban Drive who called on the State to allow the traders to import newer cars without increasing the duty.

“This will fetch the country increased foreign exchange as more Kenyans will be able to purchase vehicles,” she stated.

Recent industry data indicates a significant increase in the prices of second-hand cars manufactured between 2016 and 2017.

The rise is attributed to the growing costs associated with importing units from abroad, resulting in a double-digit reduction in motor vehicle imports for the second consecutive year.