Kenya, June 3 -- Starting July 1, 2025, buyers of popular used car models such as the Suzuki Swift, Mazda Demio, and Toyota Vitz will face significant tax increases of up to 145%, following an update to the Kenya Revenue Authority's (KRA) pricing guide.
The move is set to make these affordable vehicles less accessible for middle-class Kenyans.
According to KRA, the revised pricing guide aims to reflect current market values for imported used cars.
The adjustments will see taxes on smaller, fuel-efficient models skyrocket, while larger vehicles, such as the Lexus LX570, Prado TX and Range Rover, will benefit from reduced tax rates.
The changes have sparked concerns among car dealers and consumers, who fear the increased costs will dampen demand in the used car market.
"Models like the Demio and Vitz are popular with first-time buyers and small families. A 145% tax hike will price many out of the market," said John Mwangi, a Nairobi-based car dealer, in an interview today.
The KRA defended the update, stating it aligns with efforts to standardize taxation and curb under-declaration of vehicle values.
"The new guide ensures fair taxation based on accurate market data," a KRA spokesperson said.
The tax changes come amid rising fuel prices and economic pressures, further straining Kenyan consumers.
Industry stakeholders are calling for dialogue with KRA to mitigate the impact on buyers. Further details on the updated pricing guide are expected to be released by KRA next week.
Published by HT Digital Content Services with permission from Bana Kenya.