Imports of illegal cars with foreign number plates have increased tremendously in Kenya. As per the (KRA) Kenya Revenue Authority, Sh64.5 million worth of vehicles were seized from January to March, making Sh570.7 million worth of goods imported into Kenya in just the initial three months. Previously when the former President, Mr. Uhuru Kenyatta, imposed a ban on all restricted vehicles in the country, they confiscated Sh400,000 worth of vehicles. However, it is much greater this time. Also, this illegal importation is not just in the motor industry but also in other sectors like cigarettes, clothing and mobile phones, etc.
Comparatively, Kenya has the strictest criteria for the importation of vehicles as compared to other countries. This is why such backdoors are being used to import vehicles into the territory illegally. Car importers smuggle these cars into their own countries and then round-trip them back to their desired country for the best prices, all sold on foreign number plates. Kenya has an age limit of 8 years of used cars entering its borders. Then comes Tanzania taking in as old as ten years of cars, while countries like Rwanda and South Sudan don’t have any age limit and allow all cars to enter their boundaries.
Uganda, on the other hand, previously allowed 10-year-old cars. However, recently in July 2022, it has decided to proceed with cars only under nine years of age. Therefore, all nine-year cars will not be allowed on the borders. Due to this ongoing tax evasion in Uganda, strict policies have been implemented. The importers will have to pay all due taxes and customs before taking any other vehicle from the clearance.
Such vast differences in the age limits and other criteria to import cars in different countries in Africa have caused this illegal arbitrage. For example, people are dodging various taxes and duties while importing vehicles in Sudan and taking them to Kenya by road.
If a vehicle is imported directly to Kenya, the importer will have to buy a car for under eight years and pay heavy taxes and customs. Thus, importers opt for the cheaper method by importing older cars to Uganda and then getting it to their end destination themselves.
Importing old cars is cheaper for the importers; however, it is hazardous to be used on roads. As per the traffic road and safety act, vehicles above the age of 15 should be discarded and not used at all as they emit excess pollution and can break down and cause harm to others.
If proper measures are taken, this arbitrage and smuggling of cars can be stopped.
