Kenyan taxes including duties imposed on imported cars are provided for within the East African Community Customs Management Act 2004.
Largely seen as an incorporated law, the East African Community Customs Management Act 2004 defines liabilities, duties and responsibilities of the state, importer and exporter.
Speaking to Kenyans.co.ke, a Kenyan custom expert explained that ordinarily, every car importer would be required to meet their tax obligations except under specific provisions of the law.
"Those who are exempted from paying their duties, are required to meet certain conditions which have been set by the Kenyan Laws or International Laws like the East African Community Customs Management Act 2004," the Customs officer explained.
Motor vehicle importation in Kenya is an expensive affair that may gobble a large percentage of one's income or savings.
However, East African Community Customs Management Act 2004 provides for the duty-free importation of motor vehicles, especially based on specific conditions and criteria.
"That the owner of such goods prior to such exportation gave notice of the exportation in writing to the proper officer and produced the goods for inspection by him or her at the port or place from which they were exported the goods shall, save as otherwise provided in the Customs laws, be exempt from liability to import duties," the East African Community Customs Management Act 2004 reads in part.
1. Vehicles imported by Persons Living with Disability
The Persons with Disabilities Act 2003 and The Persons with Disabilities (Income Tax Deductions and Exemptions) Order 2010, provide exemptions for this category of Kenyans.
Persons with Disabilities Act 2003 forms the basis by which the Kenyan government exempts persons living with disability (PLWDs) from paying import duties for cars.
"To qualify for tax exemption under the cited provisions, the applicant must meet the following criteria that the person seeking exmption is registered with the Council for Persons with Disabilities (NCPWDs)," the Customs expert explained.
Among the documents that the applicant will submit is a disability assessment report that details the nature of the disability from a government-gazetted hospital.
"Disabilities (Income Tax Deductions and Exemptions) Order 2010 provides that persons with disabilities who are in receipt of an income may apply to the Cabinet Secretary responsible for Finance for exemption from income tax and any other levies on such income.
"This exemption applies on the first Ksh. 150, 000 per month or Ksh 1.8 M per annum," tax authority explained on its website.
2. Motor-sports Vehicles
Cars that are used in competitive sporting events which primarily involve the use of motorised vehicles are exempted from paying duties under specific provisions.
"In the Kenyan case, most of the motor-sports cars which are tax exempted are those that are used in Safari rally and such like events.
"A number of those Safari rally drivers often travel to Kenya with their own cars, and as such, the car applies for exemption during importation," Custom expert explained.
The motor-sports car drivers must be registered by the Kenya Motor Sports Federation, which will grant them licenses for operations in Kenya.
"Imported goods subject to duty where there is a change of ownership over such goods from an exempt person to a non-exempt person," East African Community Customs Management Act 2004.
3. Vintage Car Import
Vintage cars are highly priced and preferred by car enthusiasts and collectors in Kenya.
Most vintage cars were manufactured between 1919 and 1930, when cars were rare and a status symbol in society.
Vintage cars are categorised in various schemes of ages, and they range from antique cars to classic cars.
"Classic car prices are high because of the rarity and collectibility of these vehicles.
"Only a certain amount of these cars were made, and as they become rarer, the price for them goes up.
"Additionally, classic cars require a lot of upkeep and special care, so they typically command a higher price than other vehicles," the Custom expert explained.
Car enthusiasts seeking tax exemption when importing vintage cars must show proof of residency, year of manufacturing, historical justification and intended use while in the country.
Foreigners wishing to move to Kenya with their vintage cars must produce a contract of employment for longer than two years.
They must also show proof of ownership for over one year prior to arriving in Kenya and must be able to prove this with appropriate documentation such as the purchase invoice, payment receipts, ownership documents, and road tax documents.
At the same time, the vintage car must be imported within 90 days of one's arrival in Kenya and the work permit being issued.
"Goods to which this section applies shall not be removed from the Customs area until after due entry thereof has been made or until permission for removal has been granted by the proper officer," the East African Community Customs Management Act 2004 provides.
4. Military-imported combat vehicles
Kenya Defence Forces (KDF) is by law allowed to buy specialised motor vehicles, including combat tactical machines without going through the process of disclosing and paying duties.
Some KDF vehicles are by law considered as part of security machinery whose details must be guarded against any unnecessary exposure.
