The High Court has ordered the Kenya Revenue Authority (KRA) to file a long-delayed status report on citizen views on its plans to amend a template that is used to set prices of used imported motor vehicles.
The price template known as the Current Retail Selling Price (CRSP) is used by the KRA to set taxes on imported used cars. The template focuses on the value of a brand-new motor value when sold in Kenya less the amount of loss of value due to depreciation, profit margin, and taxes paid in Kenya.
The taxman has proposed to change the valuation method to one based on a transaction value. The transaction value method focuses on the actual value of the motor vehicle imported.
This is the actual price payable at the auction house. The Car Importers Association of Kenya (Ciak) has, however, sued KRA accusing it of failing to invite relevant stakeholders to discuss and validate the CRSP of all used imported vehicles in the country.
Ciak through its lawyer Gikandi Ngibuini requested the court to compel KRA to present a citizen participation report before pushing on with the CRSP review process.
“The issue of the status report first came on July 30 when the respondents (KRA) undertook to file the report by October 16, they did not comply and were given more time,” the lawyer said.
High Court Judge Olga Sewe ordered the taxman to table a report on the citizens' views on its proposed change in the valuation method.
“I agree you that KRA have had sufficient time, not filing a report for the second time is not an excuse, it should be filed. The case will be mentioned on November 6 for further directions,” the Judge said.
KRA’s lawyer Diana Almadi told the court that the taxman had delayed filing the public participation status report because an affidavit was yet to be signed by an officer who is away from office.
“I confirm that a stakeholders’ forum was held in Mombasa, I apologise that the replying affidavit is not before the court,” said Ms Almadi. Ms Almadi added that the notice for stakeholder engagement was published widely in newspapers and that they have given an account of what they had done since July 30.
Ciak whose membership is drawn from importers of new and used motor vehicle dealers in the country wants a declaration that KRA violated the constitution about computations of the CSRP values on used imported vehicles.
Ciak argues that the law requires that the formulation of a new CRSP be subjected to public participation involving stakeholders in the motor vehicle dealership business and members of the public who are consumers.
