The High Court in Mombasa has suspended the new Current Retail Selling Price (CRSP) that would lead to an increase in the prices of small cars commonly used by Kenyans.
The Kenya Revenue Authority (KRA) was scheduled to implement the revised CRSP on July 1, which would have led to an increase in tax on imported cars with 1500 cc and below.
On Thursday, Justice Jairus Ngaah suspended the decision until a case filed by the Car Importers Association (CIA) is heard and determined.
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“A conservatory order is hereby issued suspending the notice by Kenya Revenue Authority dated May 30, 2025, to effect the 2025 Current Selling Price Schedule on July 1, 2025,” said Justice Ngaah.
The judge said, for the avoidance of doubt, the implementation of the impugned schedule is suspended pending the hearing and determination of the petition.
The CIA’s lawyer, Gikandi Ngibuini, argued that the KRA’s decision to impose taxes on imported used small cars commonly used by lower-class citizens was unconstitutional.
KRA said the change in the tax was due to existing economic factors such as inflation, changes in the prices of new models, and tax rates.
CIA said an increase of the tax will adversely affect its members by inflating the final selling prices of the vehicles, thereby reducing motor vehicle sales in the market.
Gikandi told the judge that KRA published the new prices of imported cars they had an interest in after developing a new price schedule unilaterally and disseminating it without engaging the public, which is a requirement in line with what the constitution says.
The CIA complained that they had a similar case in 2018 in which the court stopped KRA from increasing taxes on the same models of cars without taking it for public participation.
The CIA lawyer complained that the new price announced by KRA omits a significant number of commonly imported models of cars.
“The absence of these models from the list grants undue discretion to customs officers and undermines the objectivity and consistency that CRSP is meant to guarantee,” he said.
CIA members, led by its chairman, Peter Otieno, said that KRA failed to conduct meaningful public participation, thus violating the Constitution and fair administrative justice.
“We want a declaration that the respondents’ omission of numerous motor vehicle models from the new CRSP schedule, and the resulting exposure of importers to arbitrary valuation by customs officers, constitutes a breach of the rule of law and equality before the law and opens the door to abuse, corruption, and unfair administrative action,” said Peter Otieno.
However, KRA opposed the application, insisting there was public participation, which was conducted by the authority throughout the country.
The petitioners want the court to direct KRA to apply the World Trade Organisation (WTO) customs valuation methods.
KRA opposed the petition in an affidavit sworn by Frank Orondo, who insisted that KRA was following the rules of customs valuation of goods, which are necessary to regulate and provide certainty of international trade to exporters, importers, and governments.
“…..in an ideal situation, the transactional value method is used to determine the customs value of imported goods, which is the price actually paid or payable for the goods when sold for export,” said Orond.
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The High Court in Mombasa has suspended the new Current Retail Selling Price (CRSP) that would lead to an increase in the
prices of small cars
commonly used by Kenyans.
The Kenya Revenue Authority (KRA) was scheduled to implement the revised CRSP on July 1, which would have led to an increase in tax on imported cars with 1500 cc and below.
On Thursday, Justice Jairus Ngaah suspended the decision until a case filed by the Car Importers Association (CIA) is heard and determined.
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channel
on WhatsApp
“A conservatory order is hereby issued suspending the notice by Kenya Revenue Authority dated May 30, 2025, to effect the 2025 Current Selling Price Schedule on July 1, 2025,” said Justice Ngaah.
The judge said, for the avoidance of doubt, the implementation of the impugned schedule is suspended pending the hearing and determination of the petition.
The CIA’s lawyer, Gikandi Ngibuini, argued that the KRA’s decision to impose taxes on imported
used small cars
commonly used by lower-class citizens was unconstitutional.
KRA said the change in the tax was due to existing economic factors such as inflation, changes in the prices of new models, and tax rates.
CIA said an increase of the tax will adversely affect its members by inflating the final selling prices of the vehicles, thereby reducing motor vehicle sales in the market.
Gikandi told the judge that KRA published the new prices of imported cars they had an interest in after developing a new price schedule unilaterally and disseminating it without engaging the public, which is a requirement in line with what the constitution says.
The CIA complained that they had a similar case in 2018 in which the court stopped KRA from increasing taxes on the same models of cars without taking it for public participation.
The CIA lawyer complained that the new price announced by KRA omits a significant number of
commonly imported models of cars
.
“The absence of these models from the list grants undue discretion to customs officers and undermines the objectivity and consistency that CRSP is meant to guarantee,” he said.
CIA members, led by its chairman, Peter Otieno, said that KRA failed to conduct meaningful public participation, thus violating the Constitution and fair administrative justice.
“We want a declaration that the respondents’ omission of numerous motor vehicle models from the new CRSP schedule, and the resulting exposure of importers to arbitrary valuation by customs officers, constitutes a breach of the rule of law and equality before the law and opens the door to abuse, corruption, and unfair administrative action,” said Peter Otieno.
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However, KRA opposed the application, insisting there was public participation, which was conducted by the authority throughout the country.
The petitioners want the court to direct KRA to apply the World Trade Organisation (WTO) customs valuation methods.
KRA opposed the petition in an affidavit sworn by Frank Orondo, who insisted that KRA was following the rules of customs valuation of goods, which are necessary to regulate and provide certainty of international trade to exporters, importers, and governments.
“…..in an ideal situation, the transactional value method is used to determine the customs value of imported goods, which is the price actually paid or payable for the goods when sold for export,” said Orond.
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By Willis Oketch