Over the past we have had many inquiries about how duty is calculated. People find this confusing and hard to understand, so in this article we will be looking at the whole process of Duty Calculation and the applicable charges on the same.
1. Customs Duty
This varies by the vehicle you have imported, Customs duty depends on a few factors that you ought to understand that are listed below:
- Make of the Car – i.e Toyota, Subaru, Nissan, Land Rover, BMW, etc.
- Model of the Car – i.e Premio, Forester, Sunny, Discovery, 318i, etc.
- Class of the Car – i.e. Station Wagon, Saloon, Van, etc.
- Year & Month of Manufacture – i.e. 2003/02 (Feb), 2004/06 (June), 2005/12 (Dec), etc.
- Engine Capacity – i.e. 1300cc, 1500cc, 1800cc, 2000cc, etc.
- Engine Transmission – i.e. Manual or Automatic.
- Fuel Type – i.e. Petrol, Diesel, Hybrid.
The reason as to why all the above information is important is because all these details affect the overall Current Retail Selling Price (CRSP) of the car when buying it brand new from the showroom.
CRSP is basically the price that you will pay for a brand new version of the car you are importing (i.e. if you are importing a 2003 BMW 520i, the the CRSP is the price of the car brand new from the showroom).
2. Motor Vehicle Duty Calculation
When calculating duty, Customs takes the CRSP (Current Retail Selling Price) and then deduct margin profit, depreciates it to the cars year of manufacture as per the stipulated depreciation rate, then they deduct the percentage taxes slapped on the price. The remaining amount is what Customs bases their values on. The charges are calculated as follows:
- 25% of the amount as – Import Duty
- 20% of the amount + Import Duty as – Excise Duty
- 16% of the amount + Import Duty + Excise Duty as –VAT
- 2.25% of the amount as-IDF Fee
- The total is payable to the NBK/CO-OP banks as Customs Duty.
- NBK (National Bank of Kenya), Co-operative Bank of Kenya
3. CFS/Port Charges
The CFS (Container Freight Station) charges varies with the size (Volume or cubic measurement) of the unit and the Yard which the vessel discharges/unloads. For vans like Toyota Hiace pay is around Ksh. 30,000/- to 26,000/-, 4 wheel drive cars like Prado it is around Ksh. 34,000/- to 30,000/-, Saloon Cars like Toyota Corrola NZE 11cbm is around Ksh. 22,000/- to 18,500/- .
This is what you will pay if cleared within stipulated time allowed by the customs (i.e. 7 days). Its payable against Invoice from the Port/ CFS (Container Freight Station)
4. IDF FEES
The IDF (Import Declaration Form) fees are charged at a rate of 2.75% of the cost of Customs Value. Regardless of your import, Ksh. 5,000/- is payable upfront to Treasury via National Bank/Co-op Bank
5. Shipping Line Charges – Delivery Order Fees
This normally averages Ksh. 10,000/- + VAT which amounts to an average of Ksh. 12,000/-.
Payable to the agents of the Vessel/ships which shipped your cargo and it is against their invoice.
6. Clearance Fees
Clearing and Forwarding fees normally depends with the agreement you have with your C&F Agent. Mostly it will range from Ksh. 15,000/- to 30,000/- for the units and 25,000 onwards for Containers. Its a negotiable fee and its paid to the clearing agent.
Other costs that may be involved but as per your arrangement are:
- Insurance – (as per your insurer)
- Delivery – (fuel to your destination)
- Driver Charges – (charges for the driver)
- Minor Car Service – (good measure to give the car a clean bill of health for delivery & your initial use)
If you have any more questions feel free to ask.