The jury is out. The Kenya Revenue Authority (KRA) has been using an illegal vehicle tax computation formula. It is a damning verdict from the High Court that paints the picture of an agency that has been wilfully pursuing a discriminatory assessment of tax due in its drive to collect higher revenue, with used car dealers paying the high price.
In the case, the taxman was found to be solely relying on prices supplied by new car dealers, which are almost always higher than showroom prices.
This has often seen importers of second-hand cars abandon them at the port after being hit with higher levies than anticipated only for KRA to later auction them at throwaway prices. And now the court has ordered the taxman to include used car dealers in the consultations that will inform then next computation of prices.
This whole-egg-on its face outcome could have been avoided if the agency was fair in its dealings from the start.
It beggars the question how such a discriminatory tax policy was left to stand for so long and whether other sectors are similarly crumbling under the weight of unfair taxation. KRA should take this opportunity to right its wrongs.
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