Thursday, October 22, 2009

Letter to MG Waweru (KRA)

RE: IMPORTED MOTOR VEHICLE DUTY AND TAXES CALCULATION

Dear Mr. Waweru,

Firstly, I would like to congratulate and thank you for all the good work that you have done and continue to do at KRA.

I am writing to you to seek your personal intervention in the matter of import duty and tax calculation for motor vehicles.

When one imports a motor vehicle, duty and taxes payable are calculated based upon the Current Retail Selling Price (CRSP) of the vehicle. Unfortunately, KRA does not make this information clear to importers at the outset. I have looked on the KRA website and found that the vast majority of references to Customs Value indicate CIF as the value that is used to calculate duty. I have looked at FAQ and there is only one solitary sentence here that states “The CIF is also deduced from the CRSP of the vehicle” with no further clarification of what methodology is used to do this. All other information about Customs Value, including that in the Customs Department FAQ section of the website dedicated to second hand motor vehicle import (here) refers solely to CIF as the value from which duty & taxes are calculated. Additionally, the CRSP list that KRA uses to compute duty is kept secret by KRA.

I write to you to seek your personal intervention in the following way:

To urge KRA to make ALL information (especially the full CRSP list) and methodologies relating to computation of import duties readily and easily available to the public: KRA has already taken the first step towards this by publicizing the Duty Calculation Template and making it available for free download on the site. I applaud this step and encourage KRA to go the whole way and publicize the CRSP list along with any other relevant methodologies that are used to arrive at duty figures. (For example I would suggest including another spreadsheet to enable customers to calculate how to pro rate their customs value based on engine size). I believe that KRA themselves use a series of spreadsheets to capture all this information. Why not make all this available to the public?

My reasons for making this plea are as follows:

1. Efficiency: By demystifying the duty calculation and making the process totally transparent to your customers, you empower us to offer a better service to our customers. If I as a vehicle importer have all the relevant information pertaining to duty calculation, I can quickly and easily create fairly accurate quotes for my customers. Sometimes I need to create duty quotes for potential clients of up to 20 vehicles. It becomes difficult to have to keep referring to KRA to get their estimate on each vehicle. It also wastes the time of the KRA agent. It would be immensely helpful if I (and others) could have all this information at my fingertips so that I could prepare my quotes in the shortest time possible. I would offer a better service, therefore attract more clients, import more vehicles and thereby pay more tax.

2. Eliminate Corruption: I firmly believe that in all processes, transparency helps to eliminate corruption. If it is very clear to a potential importer what import duty will be charged on his vehicle, the avenues for seeking to be corrupt are closed. I have heard of quite a few cases of people who have imported vehicles with one duty figure in mind (based on their CIF) only to be presented with a much higher figure (based on CRSP). The choices open to such a person are few especially if he does not have the extra cash for additional duty to hand. Some I have heard of have had to forfeit their investments and leave their vehicles in the port because they were unwilling/unable to pay kickbacks and were unable to raise the extra money before port charges made their undertaking unfeasible. I am sure many more take the option of paying somebody somewhere something small.

I have spoken to clearing agents, fellow importers and even people who are not directly involved with vehicle import and I have as yet not heard a single compelling reason for keeping the CRSP list and other information relevant to import duty calculations secret. I have written to KRA, called KRA, even been there in person asking the same thing: for the list to be publicized or for the reasons for sticking with this policy and all they are willing to say is that “Unfortunately the CRSP list is an internal document and cannot be publicized” or words to that effect.

I therefore seek your personal intervention to bring more transparency to the process or at least clarify what reason there is for all the secrecy that exists in this process.

It is my sincere hope that my correspondence does not cause any offence and will be taken as feedback that will contribute to a better KRA and by extension a better Kenya.

I look forward to hearing from you.

Kind Regards

47 comments:

  1. Very Very on point.

    The CRSP list is shared with the clearing agent who in turn share it with most dealers. But dealers and importers are ignorant of this list and rely solely on clearing agents.

    It happens a number of times where the agent gives you a figure payable for a certain model, you go to the bank and prepare a bankers check and you send it to the agent, who in turn presents it and is told that the duty paid is less. I have encountered a number of times where KRA officers ask for the rest of the cash in cash and issue receipts which to me is very suspect. Mind you when you present a check paying more duty than it is payable, you dont get a refund! This is also very suspect. Its also very common to find two clearing agents with the same CRSP list giving you conflicting figures. It happens all the time. Its also common to see two different figures paid for similar models. I'll give an example. Last year I imported several Toyota RAV4s model ZCA26 which is an 1800cc for two of these vehicles we paid a duty figure of KES 325k three of them we paid figure of KES355k on each. Arguments on having paid less on another unit and was still accepted fell on deaf years. It has also happened this year with Toyota Vista 1800cc. Normally the figure paid on this one is 227,500. But the KRA officer on duty on the day we were paying for one insisted that this is a lower figure and we should pay KES 255k. On bringing the same unit weeks later, the 227k was acceptable? What is the logic here?

    Something else that irks me the date of first registration of the vehicles. If you bring in a unit that was first registered say, September 2002 and another importer brings a similar model first registered say, November 2002, and we are in October, the one registered in Nov pays more duty than that one in Sep or even October by atleast 70k or as if the vehicle was manufactured in 2003! I find this very uneccessary and something that should be straightend out.

    The importer with the vehicle registered in Nov chooses to wait for the few days or two weeks till its Nov and pay demurrage for those few days rather than pay more duty.

    ReplyDelete
  2. Hi Karuro. Thank you for posting this leter publicly for all to see. I applaud you for bringing this matter to public attention. Your letter is respectful, to the point and seeks to improve efficiency. Now it is my sincere hope that the press will take up this matter and make it possible for everyone to know how much duty one will pay before they even purchase the vehicle or product. This will create greater certainty in trading decisions and will ensure corruption is nipped in the bud once and for all when it comes to tax matters. I urge KRA to publicize all tax schedules so that there is no secrecy at all.

    ReplyDelete
  3. Oh, do keep us informed... and did you send it by Registered Post? Or they have no incentive to reply...

    ReplyDelete
  4. Anthony,

    Actually some clearing agents do not seem to get the CRSP list. My agent has tried but failed to get it..yet KRA at first used to tell me that the list is disbursed to clearing agents through KIFWA..but when I called KIFWA, they had never heard of the thing.

    Infact another aspect of my problem is that KRA officers (and government officials generally) seem happy to give out totally wrong information regarding processes and procedures just to get rid of people. The very first time I went to Times Towers to ask for the CRSP list, they told me that I should just use CIF; the guys exact words were "If you can prove CIF quoted is accurate then we will levy duty based on that. We cannot charge on anything else. It is only because people under declare that we have to revert to CRSP". So he advised me to keep all correspondence and any other evidence of CIF price so I could take to them to be charged duty based on that. I later found out that is an outright lie. I went back to the same guy with pictures of two cars, exact same spec, one a year newer than the other being sold for exactly same price, then his story changed. "Oh, this we would use CRSP". So had I have taken his word initially and imported under expectation of paying duty based on my CIF, I'd have been stuck!

    I am also not a fan of the date of first registration business. I have found myself passing up good bargains because the month of registration would categorize the vehicle same as a vehicle from the next year. I also had a case in March where I imported a 2003 X-Trail registered in January 2003. Guess what KRA did? Produced a logbook that said year of manufacture is 2002! I had gone out of my way to find a 2003, bought the vehicle at slightly higher price than I would have bought a 2002, advertised and agreed sale price based on vehicle being a 2003 then they go and do that! Yes, officially the vehicle was manufactured in 2002, but I asked around and was told KRA usually use date of first registration as the Y.O.M.

    Jellyfish,

    Indeed let's hope a meaningful response is forthcoming. I wrote before and got the stock "The CRSP list is used to enable our officers to discharge their duties and is confidential and cannot be publicized at this time." or something to that effect. I often find that responses take this format yet it often helps to explain reasons for certain things. It could be that KRA have very valid reasons for choosing to operate as they do, but they simply do not feel any need to share them with us.

    Coldtusker,

    Will do.

    ReplyDelete
  5. Too much mystery in all this. The CFS's also have some stake in this... a couple of months back agents were up in arms against boss freight who seemed to be using values that were not in the crsp.Then they have this attitude of uta do (impunity)

    ReplyDelete
  6. The article is head on and if KRA is serious in eradicating corruption, Waweru ought to address this. I havent imported Subarus and want to try a hand in this. How much would i expect to pay for a 2003 forester, as of Feb 2010. Any one with a list of subaru CRSPs.

    FW

    ReplyDelete
  7. Folks, I just noted that KRA published a spreadsheet with CRSP as of 3rd Dec 2009. A good move. What would interest me now is calculating depreciation in time for any model.
    FW

    ReplyDelete
  8. Does anyone have the current CRSP list to share it with me?

    ReplyDelete
  9. Nice post, on times like these the credit for houses, cars, etc etc are just for rich people the market descriminate poor people and and the upper middle class, because the credit houses or banks have many interests and ask for high fees.
    Thanks

    ReplyDelete
  10. Check out www.dutycalc.co.ke. I can recommend it anytime. Easy to use and up to date CRSP

    ReplyDelete
  11. I have been surfing online more than 2 hours today, yet I never found any interesting article like yours.
    It is pretty worth enough for me. Personally, if all webmasters and bloggers made
    good content as you did, the internet will be much more useful than ever before.


    Feel free to surf to my web blog :: work from home online

    ReplyDelete
  12. Aw, this was a very good post. Taking a few minutes and actual
    effort to produce a top notch article… but what can I say… I
    put things off a lot and don't manage to get nearly anything done.

    Review my web-site; best day trading softwareforex commodities

    ReplyDelete
  13. I will immediately grasp your rss feed as I can't find your e-mail subscription hyperlink or e-newsletter service. Do you've any?
    Please allow me know so that I could subscribe.
    Thanks.

    My weblog best way to make money online
    Also see my website :: best way to make money online

    ReplyDelete
  14. An impressive share! I've just forwarded this onto a coworker who had been doing a little research on this. And he actually ordered me lunch due to the fact that I stumbled upon it for him... lol. So allow me to reword this.... Thanks for the meal!! But yeah, thanx for spending time to talk about this topic here on your blog.

    Look at my web page trading penny stocks

    ReplyDelete
  15. Tremendous things here. I'm very happy to see your post. Thank you a lot and I am having a look ahead to touch you. Will you please drop me a mail?

    Take a look at my blog post :: money online earnhow can i work from home

    ReplyDelete
  16. I was recommended this web site by my cousin. I'm not sure whether this post is written by him as no one else know such detailed about my problem. You are amazing! Thanks!

    Review my page: online part time jobs work from home

    ReplyDelete
  17. Your means of describing all in this article is actually fastidious, all
    be capable of effortlessly know it, Thanks a lot.

    Here is my page ... ideas to make money from home
    Also see my page: how to find jobs online

    ReplyDelete
  18. These are truly wonderful ideas in concerning blogging.

    You have touched some nice points here. Any way keep up wrinting.


    Here is my blog post ... day trading strategiesfap turbo forex

    ReplyDelete
  19. What's up, always i used to check web site posts here in the early hours in the morning, as i love to find out more and more.

    Also visit my blog post :: fast money making online

    ReplyDelete
  20. Spot on with this write-up, I truly believe this site needs a great
    deal more attention. I'll probably be returning to read through more, thanks for the advice!

    Feel free to surf to my homepage; how to make money from home legally

    ReplyDelete
  21. Hey there I am so excited I found your web site, I really found you by
    error, while I was searching on Askjeeve for something else, Regardless I am here now and would just like to say kudos for a marvelous post and a all round interesting blog (I
    also love the theme/design), I don't have time to read it all at the moment but I have bookmarked it and also included your RSS feeds, so when I have time I will be back to read more, Please do keep up the great work.

    Here is my web blog: work from home online

    ReplyDelete
  22. Remarkable things here. I am very satisfied to look your post.
    Thank you so much and I am having a look forward to contact you.
    Will you kindly drop me a e-mail?

    Also visit my web site: how to make money illegally fast

    ReplyDelete
  23. Highly energetic article, I liked that a lot. Will there be a part
    2?

    my site :: work from home online jobs

    ReplyDelete
  24. Fantastic post however I was wanting to
    know if you could write a litte more on this topic?
    I'd be very grateful if you could elaborate a little bit more. Appreciate it!

    Look at my web site ... how can i make money from home

    ReplyDelete
  25. I am in fact thankful to the holder of this web page who has shared this wonderful paragraph at
    at this time.

    My website :: how to make easy money online

    ReplyDelete
  26. Excellent post. I was checking constantly this blog and I'm impressed! Extremely helpful information specially the last part :) I care for such info much. I was looking for this certain information for a very long time. Thank you and good luck.

    Look at my web page work from home jobs in michigan

    ReplyDelete
  27. It's actually a nice and useful piece of information. I'm glad that you simply shared this helpful information with us.
    Please stay us informed like this. Thanks for
    sharing.

    Look at my web blog online making money

    ReplyDelete
  28. This post will help the internet people for building up new blog or even a blog from start to
    end.

    Also visit my website - forex for you

    ReplyDelete
  29. Write more, thats all I have to say. It appears that you relied on some reputable sources to make your point.
    You obviously know what you're talking about.

    Feel free to visit my web page: How to Golf
    My site > how to golf

    ReplyDelete
  30. Hurrah! After all I got a website from where I be able to really take helpful information concerning my study and knowledge.


    Also visit my blog post win money online free

    ReplyDelete
  31. I was recommended this blog through my cousin.

    I am no longer certain whether this submit is written via
    him as no one else know such specific about my difficulty.

    You're amazing! Thank you!

    Here is my web site where can i get free money orders

    ReplyDelete
  32. Hi to every , for the reason that I am truly eager of reading this weblog's post to be updated daily. It carries good information.

    My web page - i need free money to pay my bills

    ReplyDelete
  33. Thanks for the auspicious writeup. It in truth used to be
    a amusement account it. Look advanced to far delivered agreeable from you!
    However, how can we keep up a correspondence?

    Feel free to surf to my web blog ... how to get free money

    ReplyDelete
  34. Hiya vегy nice web ѕite!! Guy .. Exсellent .

    . Wοnderful .. I will bookmark уour website and tаke
    thе fеeds аdԁitіonаllу?
    I am satіsfied to ѕеarсh out а lot of useful information here іn thе put up, ωe
    need deνelop extrа techniques on this regard,
    thаnkѕ for shaгing. . . . . .

    Also visit my pagе :: cialis pfizer

    ReplyDelete
  35. Υour оwn ωrite-up haѕ сonfіrmeԁ nеceѕsarу tο us.
    It’ѕ quite helpful and yοu're simply clearly very knowledgeable in this field. You possess exposed my face to be able to numerous thoughts about this specific topic along with interesting and strong articles.

    Feel free to visit my blog post :: buy ambien
    Here is my webpage ; ambien

    ReplyDelete
  36. Would you mind if I quote a several of your blogposts as long as I provide credit and sources back to your webpage: http://www.
    blogger.com/comment.g?blogID=8705889459556077506&postID=2061462186362071723.
    Please let me know if this is okay with you. With thanks

    Thanks; visit my webpage on QROPS

    ReplyDelete
  37. Fantastic website you have here, but I was curious about if you
    knew of any discussion boards that cover the same topics discussed in this article?

    I'd really like to be a part of community where I can get advice from other knowledgeable individuals that share the same interest. If you have any suggestions, please let me know.
    Many thanks!

    Thanks; visit my web page at Tax Free Investments

    ReplyDelete
  38. The write-up prοvides рroѵen helpful to me ρerѕοnally.
    It’s really helpful and yοu're simply naturally very experienced in this field. You get opened my sight to various views on this specific subject matter along with intriguing and strong written content.

    Also visit my web-site :: Buy Klonopin
    Check out my blog :: Klonopin

    ReplyDelete
  39. I all the time used to study article in news papers but now as
    I am a user of internet thus from now I am using
    net for articles or reviews, thanks to web.

    Have a look at my blog: steelhead fly fishing

    ReplyDelete
  40. Unquestionably believe that which you stated. Your favorite justification seemed to be at the net the simplest factor to be mindful
    of. I say to you, I certainly get annoyed while other people consider issues that they just don't understand about. You managed to hit the nail upon the top and outlined out the entire thing with no need side effect , people could take a signal. Will likely be again to get more. Thanks

    My web page; Bench Craft Company advertising techniques for kids

    ReplyDelete
  41. Off for a scan on my finger, сan barely tуpe ωith this .

    Rly hard pressing the κеyѕ quickly wіth a fгаctuгeԁ forefingeг!
    ?.

    Mу web ρage :: friendblaze.com

    ReplyDelete
  42. I'm amazed, I must say. Rarely do I come across a blog that's both educative and interesting, and let me tell you, you've hit the nail on the head. The issue is an issue that too few folks are speaking intelligently about. I am very happy that I stumbled across this during my search for something concerning this.

    Feel free to surf to my web blog; Bench Craft Company advertising slogans that rhyme

    ReplyDelete
  43. It is also referred to as an email opt in list, or your hair salon private student loans for people campaign.



    Feel free to visit my website - Student Loan

    ReplyDelete
  44. Currently it sounds like Wordpress is the best blogging platform out there right now.
    (from what I've read) Is that what you are using on your blog?

    Feel free to visit my web page; Path of Exile Wraeclast

    ReplyDelete
  45. Hi, i think that i saw you visited my website so i came to “return
    the favor”.I'm attempting to find things to improve my web site!I suppose its ok to use a few of your ideas!!

    Look at my blog: Marvel Heroes Lets Play

    ReplyDelete
  46. Woah! I'm really enjoying the template/theme of this site. It's simple, yet effective.
    A lot of times it's very hard to get that "perfect balance" between superb usability and visual appearance. I must say that you've
    done a excellent job with this. In addition, the blog loads
    extremely quick for me on Chrome. Excellent Blog!


    my webpage - Action RPG

    ReplyDelete