Vehicle importers want to be exempted from new KRA certificate of origin rule

Car dealers now Kenya Revenue Authority to exempt imported used vehicles from the new Certificate of Origin requirement, arguing that there is enough information on these units.

The move, they say, would simply "export” the much-needed foreign exchange, which will cost local traders and push up the cost of doing business and vehicle prices.

The Car Importers Association of Kenya (CIAK), which brings together vehicle importers and dealers yesterday said all used units imported into the country already have logbooks, export and inspection certificates containing all  details KRA requires for identifying the country of origin.

“No unit can be cleared within our borders without the above documents,” CIAK chairman Peter Otieno says in a letter to the KRA Commissioner, Customs and Border Control, Lilian Nyawanda.

He said the move will see Kenyans export close or more than Sh2 trillion to foreign economies, monies which should be spent locally.

This is based on the average annual import of second-hand vehicles, where last year, the country imported 72,486 units. With the certificate costing Sh28,000, it translates to about Sh2.03 trillion.

Japan is the top import source for used cars (80 per cent) with other sources being United Arab Emirates, United Kingdom, Singapore and South Africa.

“In our own opinion, the Country of Origin should be on the logbook and the inspection certificates but we should not spend the said amount of money while we have the quoted documents. It is therefore our humble appeal that this requirement should not apply to motor vehicles at all,” said Otieno.

He said the industry is open for consultations with KRA and Kenya Bureau of Standards (Kebs).

KRA last month directed that effective July 1, all imports must have the said certificate issued by a competent authority in the exporting country.

To support a smooth transition, a limited window until September 1, 2025 has been provided to facilitate compliance and allow importers time to secure the required documents.

This marks a radical shift from prior practice, where Certificates of Origin were required only for goods under preferential trade arrangements to determine origin and confer tariff benefits.

A Certificate of Origin shall be valid if it discloses name and address of both the exporter and importer, port of origin, accurate description of the goods, quantity of the goods, country of origin; and country of destination.

Non-compliance will see KRA impose penalties, which shall lead to seizure or forfeiture of goods to the Commissioner or an authorised officer.

“Note that at the lapse of this window, non-compliant consignments shall be liable to forfeiture as provided for in the Act,” Nyawanda said in a notice, “KRA remains committed to facilitating legitimate trade while ensuring full compliance with the law.”

The move is not only a concern for car importers but also small traders who through the Shippers Council of Eastern Africa (SCEA),  have indicated that it will impact on them mainly those who consolidate cargo.

According to SCEA, it is increasingly common for importers to procure goods from shippers who consolidate cargo from multiple countries of origin.

For example, a shipper based in Singapore may source products from various countries such as China, Hong Kong, Indonesia, and Malaysia, and then consolidate the cargo into a single shipment destined for Kenya.

“In such a scenario, we would like to understand the appropriate documentation required at the point of importation into Kenya.

Is the shipper in Singapore required to provide individual certificates of origin from each of the original source?" posed SCEA chief executive Agayo Ogambi.

He said they would seek further consultations and also call for exemptions.

The World Customs Organisation highlights that non-preferential proofs of origin should not be mandatory for general imports.

This is only required when a specific trade policy such as anti-dumping, quotas or origin marking calls for it and should be applied on a case-by-case basis, not automatically.