What You Need to Know
BY Magdalene Ngonyo.
#MrMadam.
Introduction:
Car ownership in Kenya is about to change. As of July 1, 2025, the Kenya Revenue Authority (KRA) will introduce a new tax framework for imported vehicles, which will affect the cost of some popular small cars like the Toyota Vitz, Mazda Demio, Suzuki Swift, and Nissan Note. These changes are expected to significantly impact both car buyers and dealers across the country.
In this blog, we’re going to break down the new tax structure, explain why it has changed, what has led to the change, and share what it means for you as a current or future car buyer.
1. Let’s Kick Off — Why Is KRA Implementing a Revised CRSP?
Let’s start by defining CRSP.
The Current Retail Selling Price (CRSP) is a valuation list used by KRA to determine the taxable value of imported vehicles. It sets benchmark prices for different car models and years, which customs officials use to calculate import duty, excise duty, VAT, and other taxes.
Previously, the CRSP was based on fixed retail prices that often did not match actual market values, leading to disputes and legal challenges. The new law introduces an updated CRSP, effective from July 1, 2025, replacing the outdated prices with a more accurate list that reflects real market prices and exchange rates.
This change aims to:
- Align vehicle valuations with current market realities
- Address legal concerns over the previous valuation method
- Ensure consistent and fair taxation across all imported vehicles
How Does the New CRSP Affect Import Taxes on Used Cars?
Import taxes in Kenya are calculated cumulatively based on the vehicle’s declared value or the CRSP, whichever is higher. The main tax components include:
| Tax Component | Rate | Description |
| Import Duty | 25–35% | Based on the vehicle’s value |
| Excise Duty | 25–35% | Depends on engine size and type |
| Value Added Tax (VAT) | 16% | Fixed rate on cumulative value |
| Import Declaration Fee (IDF) | 3.5% | 3.5% of vehicle value |
| Other Levies | Variable | Includes Railway Development Levy, etc. |
With the new CRSP, the taxable value of many vehicles will increase, leading to higher import taxes. Some popular models like the Toyota Vitz Hybrid and Mazda CX-5 could see tax increases of up to 145%.
Additionally, the law enforces a maximum depreciation of 65% for vehicles up to 8 years old. This means that when calculating taxable value, the vehicle’s price cannot be depreciated beyond 35% of its original price, limiting how much importers can reduce their tax liability.
What Cars Have Been Affected?
- Toyota Vitz Hybrid – Import duty increased from Ksh 319,501 to Ksh 508,927
- Mazda Demio (diesel variant) – From Ksh 244,000 to Ksh 564,000
- Mazda CX-5 (petrol, 2.0L) – From Ksh 721,500 to Ksh 1.07 million
- Toyota Axio – From Ksh 457,600 to Ksh 539,900
- Toyota Fielder – From Ksh 362,300 to Ksh 568,500
- Subaru Forester XT – From Ksh 669,300 to Ksh 812,100
- Nissan Note – From Ksh 160,000 to Ksh 224,000
2. Why the Change?
KRA cites the need to: – Reflect accurate car valuations in today’s economy – Capture fair taxes in line with inflation and vehicle demand – Close loopholes used in undervaluing vehicles at customs and the dollar rate.
The government is now placing more emphasis on actual invoice values, plus shipping and insurance, but with a cap of 65% depreciation. That means even an 8-year-old car will be taxed like it’s still worth a significant portion of its original price.
3. How This Affects Buyers
- Higher Prices: Car prices are expected to rise by Ksh 200,000 to Ksh 500,000, depending on the model.
- Import Caution: Many buyers are now holding back, leading to a slowdown in import volumes.
- Greater Demand for Locally Used Cars: The demand for Kenyan-used vehicles is rising as taxes on imports spike.
- Increased Financing Needs: Buyers may now need bigger loans to afford the same cars they could buy last year.
4. Smart Alternatives for Buyers
If you’re looking to buy a car post-July 2025, here are some savvy strategies:
- Choose Locally Used Cars: Skip import duties entirely and buy from local showrooms like Magda Auto Hub.
- Opt for Lower CC Cars (<1500cc): These attract lower excise taxes and remain budget-friendly.
5. What Magda Auto Hub Recommends
At Magda Auto Hub, we believe in informed buying. This is not the time to panic; it’s time to plan smartly. Whether you’re a budget-conscious buyer or a high-end investor, we’ll walk with you every step of the way:
- Honest breakdown of pricing
- Tax advisory and sourcing guidance
- Access to a wide range of locally used and low-tax imports
Conclusion
Yes, the changes are real. But you still have options. With the right knowledge and a trustworthy partner like Magda Auto Hub, you can still find the perfect car for your needs and budget.
Ready to buy smart in 2025? Let’s talk. Reach out to Magda Auto Hub today.
Written with love and clarity for every buyer navigating the road ahead.
