The wheels of justice have turned, albeit temporarily, in favor of Kenyan car importers and the broader public, as the High Court steps in to halt the Kenya Revenue Authority's (KRA) controversial updated Current Retail Selling Price (CRSP) schedule for used motor vehicles. In a significant ruling delivered just a day before its intended implementation, the court has put the brakes on what many consider an arbitrary and procedurally flawed tax revision. This decision isn't merely a delay; it's a profound statement on the principles of good governance, public participation, and the rule of law in Kenya's dynamic economic landscape.
At the heart of the matter lies a circular dated May 22, 2025, and a subsequent public notice from May 30, 2025, both aimed at introducing a new CRSP list set to take effect from July 1, 2025. The petitioner, whose identity remains undisclosed in the provided information but clearly represents the interests of affected parties, argued vehemently that this new schedule was rolled out without any meaningful public participation. This directly contravenes the foundational tenets of the Kenyan Constitution, specifically Article 10 and Article 201, which champion inclusivity and transparency in legislative and public finance processes.
KRA, in its defense, asserted that it had consulted stakeholders. However, this claim faces a robust challenge from the petitioner, who contends that such consultations were restrictively confined to car dealers, effectively sidelining the very consumers and general public who would bear the brunt of these revised valuations. The court has been pressed to compel KRA to furnish concrete evidence of these consultations, including the identities of the stakeholders involved and detailed records of the engagement process. This demand underscores a critical principle: mere assertion of consultation is insufficient; demonstrable proof of inclusive and meaningful engagement is paramount.
Beyond the issue of public participation, the petition delves into the legal authority and procedural validity of the CRSP schedule itself. It argues that the CRSP schedule, issued by KRA’s Commissioner for Customs and Border Control and Commissioner General, derives its authority from Section 122 and the Fourth Schedule of the EAC Customs Act. Consequently, it falls under the purview of Article 94(6) of the Constitution and, crucially, qualifies as a "statutory instrument" under the Statutory Instruments Act. This classification carries significant weight, as it mandates specific procedural requirements, including the laying of the instrument before Parliament. The petitioner alleges that KRA failed to adhere to this vital parliamentary oversight, further weakening the legal standing of the revised schedule.
Perhaps one of the most contentious points raised is the brevity of the 30-day implementation notice. The petitioner unequivocally terms this notice as unreasonable, arbitrary, and a direct affront to Article 47 of the Constitution, which guarantees fair administrative action. The practical implications of such a short notice period are far-reaching and potentially devastating for importers. Industry norms dictate that the entire vehicle import process, from procurement to shipping and final clearance, typically spans a considerable period of three to six months. This abrupt shift in valuation methodology risks unfairly penalizing importers who had already committed substantial funds based on the previously established 2019 CRSP schedule. Many vehicles, the court papers reveal, are already "in the high seas enroute to the country," ordered under the old framework, and now face an uncertain and potentially significantly more expensive future if the new schedule were to be immediately enforced.
Adding another layer of complexity, the court papers highlight the "fundamental errors and omissions" pervading the hurriedly assembled new CRSP. These are not minor discrepancies; they include the complete omission of several vehicle models commonly imported into the country by both dealers and individual customers. Furthermore, the schedule is reportedly riddled with erroneous matches between car models and non-existent features, incorrect fuel types, inaccurate chassis numbers, and even attaches disparate values to identical car models. Such inaccuracies cast a long shadow over the certainty and fairness of the proposed tax base, raising serious questions about the diligence and accuracy of KRA's data collection and valuation processes.
For now, the High Court has granted a temporary reprieve, suspending the implementation of the revised CRSP list until July 17, 2025. This allows for a deeper examination of the merits of the case, and all related documents have been ordered to be served on the respondents. This interim order is a crucial moment for all stakeholders – car importers, dealers, consumers, and even KRA itself – to reflect on the implications of transparent governance and fair administrative practices. While KRA's mandate to collect revenue is undeniable, the means by which it achieves this must align with constitutional principles and respect the legitimate expectations of those it seeks to tax. The coming weeks will undoubtedly shed more light on whether this temporary suspension will pave the way for a more inclusive and legally compliant approach to vehicle valuation, or simply serve as a brief interlude before a continued legal battle. One thing is certain: the conversation around fair taxation and public participation in Kenya's import sector has just become a lot more interesting.
