📘 Chapter 3: Understanding KRA Taxes and Import Duties
📘 Chapter 3: Understanding KRA Taxes and Import Duties
How to Estimate Your Total Cost Before You Commit
One of the biggest challenges for first-time car importers is understanding how taxes and duties are calculated by the Kenya Revenue Authority (KRA). These taxes can sometimes be higher than the actual cost of the car — so understanding them is critical before making a purchase.
This chapter simplifies the KRA formula and shows you how to estimate taxes like a pro.
🧮 3.1 Overview of Taxes When Importing a Car
When your vehicle arrives at the port of Mombasa, KRA uses a specific formula to determine how much you must pay before the car can be released to you.
Here are the six main taxes and fees applied to imported cars:
| Tax Type | Rate | Applied To |
|---|---|---|
| Import Duty | 25% | CIF (Cost + Insurance + Freight) |
| Excise Duty | 20% to 35% | CIF + Import Duty |
| VAT | 16% | CIF + Import Duty + Excise Duty |
| IDF Fee | 2% | CIF only |
| RDL Fee | 1.5% | CIF only |
| Total Tax Payable | ~65% to 85% of CIF | Varies based on vehicle type and age |
🚗 3.2 What Is CIF (Cost, Insurance & Freight)?
CIF is the base value of the car that KRA uses to calculate all other taxes. It includes:
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The purchase price of the car
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The cost of international shipping
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Marine insurance
If you bought a Toyota Axio for $5,000 and shipping to Mombasa was $700, your CIF would be roughly $5,700.
📌 KRA uses a reference value database (CRSP) for each car model. Even if you paid less, they use their own minimum CIF estimate.
📊 3.3 Sample Tax Calculation (Toyota Axio 2016)
Let’s say your CIF = KES 650,000
| Tax Type | Calculation | Tax Amount (KES) |
|---|---|---|
| Import Duty (25%) | 25% × 650,000 | 162,500 |
| Excise Duty (20%) | 20% × (650,000 + 162,500) = 20% × 812,500 | 162,500 |
| VAT (16%) | 16% × (650,000 + 162,500 + 162,500) = 16% × 975,000 | 156,000 |
| IDF (2%) | 2% × 650,000 | 13,000 |
| RDL (1.5%) | 1.5% × 650,000 | 9,750 |
| 🧾 Total Taxes | Sum of above | 503,750 |
✅ Landed Cost = CIF + Taxes = 650,000 + 503,750 = KES 1,153,750
🔧 3.4 How Engine Size Affects Excise Duty
KRA charges different excise duty rates based on engine capacity:
| Engine Size (cc) | Excise Duty Rate |
|---|---|
| Below 1500cc | 20% |
| 1501cc – 2500cc | 25% |
| 2501cc and above | 30–35% |
| Hybrid Vehicles (most cases) | 10% |
💡 Hybrid vehicles are taxed less under green energy policies — making them cheaper to import in the long run.
🛠️ 3.5 Use a Car Import Calculator (Like Ours)
To make your life easier, we built a Car Import Calculator on the Code & Clutch platform that:
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Uses the official KRA formula
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Adjusts based on engine CC and car year
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Converts USD/JPY to KES with daily exchange rates
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Gives you a total landed cost instantly
🔗 Visit: codeandclutch.blogspot.com > Tools > Import Calculator
📱 Or scan the QR code at the back of this eBook to open it on your phone
🚩 3.6 Hidden Fees to Keep in Mind
Besides taxes, factor in:
| Fee Type | Estimated Cost (KES) | Notes |
|---|---|---|
| Clearing Agent Fee | 30,000 – 50,000 | Based on car size and port documentation work |
| Port Storage (if delayed) | 1,500 – 3,000 per day | Starts after 4–5 free days |
| NTSA Registration & Plates | 7,000 – 10,000 | Needed to drive on Kenyan roads |
| Inspection Re-checks | 5,000+ | If inspection fails or missing |
✅ 3.7 Tax Summary Checklist
| ✅ Task | Status |
|---|---|
| Confirm CIF estimate using exporter | ☐ |
| Use Code & Clutch calculator to estimate taxes | ☐ |
| Know your engine CC and excise bracket | ☐ |
| Add clearing agent and NTSA fees | ☐ |
| Prepare full budget before paying exporter | ☐ |
Up next, we’ll look into the auction grading system and how to verify a car’s real condition — so you avoid surprises when the car arrives.
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