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1. The petitioner in amended petition has been described as “a legal corporate individual incorporated under the Societies Act, Cap 108 - Laws of Kenya operating business in Kenya and having its registered offices in Mombasa.” The amended petition is dated 4 July 2025 and, in the main, it seeks the following orders:
“a) A declaration that the 1st Respondent''s publication and intended implementation of the new Current Retail Selling Price (CRSP) values for used imported motor vehicles, scheduled to take effect on 1ˢᵗ July 2025, without conducting meaningful public participation, violates the Constitution and the Fair Administrative Action Act, 2015.
b) A declaration that the Respondents'' failure to consult the Petitioner and other stakeholders, and their subsequent unilateral publication of new CRSP values, contravenes the principles of good governance, accountability, transparency, and public participation under Articles 10, 47, 118, 201 and 232 of the Constitution of Kenya, 2010.
c) A declaration that the Respondents have violated the Petitioner''s and its members'' right to fair administrative action under Article 47 of the Constitution of Kenya, 2010 and Section 4 of the Fair Administrative Action Act, 2015 by failing to give prior notice, reasons, methodology, or opportunity to be heard before implementing the new CRSP values.
d) A declaration that the Respondents'' omission of numerous motor vehicle models from the new CRSP schedule, and the resulting exposure of importers to arbitrary valuation by customs officers, constitutes a breach of the rule of law, equality before the law, and opens the door to abuse, corruption, and unfair administrative action.
e) An order directing the Respondents to apply the World Trade Organization (WTO) customs valuation methods provided under the Fourth Schedule of the WTO Agreement, as read together with the East African Community Customs Management Act, 2004 as corroborated by the invoice value and the bank transfer value of such units for all motor vehicle models not listed in the 2019 CRSP Schedule, in order to ensure transparency, consistency, and predictability in motor vehicle valuation and avoid the numerous rulings.
f) Such further orders or directions as this Honourable Court shall deem just and appropriate in the circumstances of this case in the interest of justice.
g) Costs of the petition be awarded to the Petitioner.”
2. Alongside the petition is an application by way of a motion, dated 20 June 2025, seeking conservatory orders. The application is expressed to be brought under articles 22, 23, 47 and 165 of the Constitution, and, rules 23 and 24 of the Constitution of Kenya (Protection of Rights and Fundamental Freedoms) Practice and Procedure Rules, 2013. The prayers in the motion are as follows:
“1. That this application be certified as urgent and service of the same upon the Respondents be dispensed with in the first instance.
2. That pending the hearing and determination of this application, the Honourable Court be pleased to issue a conservatory order suspending the public notice issued by the Kenya Revenue Authority (KRA) dated 30ᵗʰ July, 2025 to the effect that the 2025 Current Retail Selling Price (CRSP) Schedule will take effect on 1st July, 2025.
3. That pending the hearing and determination of the petition filed herein, the Honourable Court be pleased to issue a conservatory order suspending the public notice issued by the Kenya Revenue Authority (KRA) dated 30ᵗʰ July, 2025 to the effect that the 2025 Current Retail Selling Price (CRSP) Schedule will take effect on 1ˢᵗ July, 2025.
4. That the costs of this application be provided for.”
It is this application that the court is concerned about.
3. The application is supported by the affidavit of Peter Otieno, who has identified himself in the affidavit as the National Chairman of the petitioner. He has sworn that the petitioner has filed the petition on its own behalf and on behalf of its 73 members and who import and sell in Kenya new and used motor vehicles.
4. For the purposes of enabling the petitioner’s members and other motor vehicle dealers, and also clearing and forwarding agents to calculate the import duty payable upon importing motor vehicle units, the 1st respondent publishes the "Current Retail Selling Price" (or “the CRSP").
5. The petitioner is said to have a significant interest in the determination of CRSP values because any hikes in duty adversely affect its members by inflating the final selling price of the vehicles, thereby reducing motor vehicle sales.
6. On 30 May, 2025, the 1st respondent published a new CRSP schedule (or “the 2025 Schedule”), set to take effect from 1July, 2025, for use in assessing the customs value of used imported motor vehicles and for computing tax obligations such as Import Duty, VAT, Excise Duty, and Import Declaration Fees.
7. It is alleged that the new CRSP schedule was developed unilaterally and disseminated without engaging the public or industry stakeholders in any manner consistent with the Constitution. Accordingly, the 1st respondent''s actions violated Articles 10, 47, and 201 of the Constitution which require public participation, fair administrative action, and openness in financial matters.
8. The Petitioner has previously challenged a similar breach in Mombasa High Court Constitutional Petition No. 190 of 2018; Car Importers Association of Kenya versus Kenya Revenue Authority & 3 Others, where the High Court declared a previous CRSP schedule unlawful for want of public participation. The Court also directed the 1ˢᵗ respondent to ensure that future CRSP publications were subject to public scrutiny and stakeholder input within a period of 12 months from the date of the said judgment. The respondents are yet to comply with the court order. The current CRSP values are alleged to be tainted with the same procedural deficiencies declared unlawful in the 2019 judgment, demonstrating the 1ˢᵗ respondent''s blatant disregard of judicial authority. Contrary to the 1st respondent’s allegations, any consultations conducted with respect to the current CRSP values were informal, exclusive, and inaccessible to the public. In particular, “there were no published methodologies, justification papers, or impact assessments.”
9. According to the petitioners, the newly published CRSP schedule omits a significant number of commonly imported vehicle models and what it has described as “trim variants”, thereby exposing vehicle importers to arbitrary, unpredictable, and potentially inflated tax assessments. The absence of these models from the official list grants undue discretion to customs officers and undermines the objectivity and consistency that the CRSP is meant to guarantee.
10. The effect of the new CRSP regime is not merely economically regressive but also structurally exclusionary, in that it disproportionately targets vehicles most commonly purchased by low- and middle-income earners while appearing to shield high-end luxury vehicles from similar tax escalation.
11. The implementation of the new CRSP values, in its current form, is tone-deaf to the economic realities facing the majority of Kenyans and is contrary to the constitutional principles of equity, fairness, inclusivity, and socio-economic justice. It entrenches inequality by rendering essential tools of mobility and economic survival accessible only to the wealthy elite.
12. According to the petitioners, the taxation policies should be guided by economic rationality and social equity, shielding vulnerable populations from disproportionate burdens and imposing progressive obligations on those with greater means. However, the new CRSP regime offends this logic because vehicles that are not only essential but indispensable to daily life and income generation for the common citizens such as the Toyota Vitz, Mazda Demio, and Suzuki Swift have seen dramatic and punitive spikes in tax rates, while luxury vehicles like the Lexus LX570 and Volkswagen Tiguan, associated with upper-class affluence, have enjoyed tax reductions.
13. It is contended that the actions and omissions of the respondents have violated the petitioner''s constitutional rights, particularly the right to fair administrative action under article 47(1) of the Constitution by publishing and implementing the 2025 CRSP values without following a transparent, accountable, and procedurally fair process. The petitioner and other stakeholders were neither adequately consulted nor afforded a reasonable opportunity to influence the outcome of a policy that has direct, far-reaching economic consequences.
14. The petitioner also alleges that the respondents have violated the petitioner’s right to public participation as enshrined in articles 10(2)(a), 118(1)(b), 201(a) and 232(1)(d) of the Constitution, by excluding the petitioner and other key stakeholders from the formulation and finalisation of the 2025 CRSP values. It is their case that no meaningful engagement was conducted, and the feedback, apparently submitted by the petitioner was either ignored or selectively applied.
15. Public participation, it is sworn, is not optional. It is a constitutional imperative under article 10(2)(a) of the Constitution and a precondition to the legitimacy of policy decisions. The 1ˢᵗ respondent''s failure to comply with this obligation renders the CRSP schedule constitutionally infirm and administratively void.
16. The respondents opposed the application and a replying affidavit to this end has been sworn by Frank Orondo who has sworn that he is an officer appointed under section 13 of the Kenya Revenue Authority Act, cap.469 and currently deployed to 2nd respondent’s Valuation and Tariff Unit of the Customs and Border Control Department. Accordingly, he is conversant with the actions giving rise to the petitioner’s petition.
17. The 1st respondent’s Valuation and Tariff Unit, is charged with implementing various revenue statutes including the East African Community Customs Management Act, 2004 and the attendant Regulations. Part of the mandate of the valuation unit of the 2nd respondent includes determination of and implementation of valuation regulations for motor vehicles in Kenya.
18. It is contended that Kenya Revenue Authority is established under the Kenya Revenue Authority Act, and that under Section 5 (1) thereof, the Authority is an agency of the Government for the collection and receipt of all revenue. Further, under Section 5 (2) of the Act, with respect to the performance of its functions under subsection (1), the Authority is required to administer and enforce all provisions of the written laws set out in Part 1 and 2 of the First Schedule to the Act for the purposes of assessing, collecting and accounting for all revenues in accordance with those laws. And under Part I of the First Schedule to the Act, the 1st respondent is mandated to enforce the provisions of the East African Community Customs Management Act, 2004.
19. As far as the question of customs valuation of imported and used motor vehicles is concerned, it is sworn that the rules of customs valuation of goods are necessary to regulate and provide certainty of international trade to exporters, importers and Governments. The World Trade Organization (or “the WTO”) was formed by member countries and is mandated to, inter alia, operate the global system of trade rules and helps developing economies build their trade capacity.
20. The WTO Agreement on implementation of Article VII of the General Agreement on Tariffs and Trade 1994 (or “the WTO Agreement”) on Customs valuation, aims for a fair, uniform and neutral system for the valuation of goods for customs purposes, a system that conforms to commercial realities, and which outlaws the use of arbitrary or fictitious customs values. Part I of the WTO agreement provides for the rules of Customs valuation, which rules provide for the valuations methods to be used by partner states in the determination of customs value of imported goods.
21. Article 1 of the WTO Agreement Rules on Customs Valuation provides for the primary basis of valuation of custom goods to be based on transaction value, that is the price actually paid or payable for the goods when sold for export to the country of importation adjusted in accordance with the provisions of Article 8.
22. In compliance in compliance with the WTO agreement, the Partner states to the East African Community have enacted and implemented the East African Customs Community Management Act, which, inter alia, includes the rules on Customs valuation as provided for under the WTO agreement. Section 122 of the EACCMA provides that where imported goods are liable to import duty ad valorem, the value of such goods shall be determined in accordance with the Fourth Schedule to the Act and import duty shall be paid on that value.
23. Section 122(6) of EACCMA provides that when applying or interpreting the said section and the provisions of the Fourth Schedule, due regard shall be taken of the decisions, rulings, opinions, guidelines and interpretations given by the Directorate, the World Trade Organization of the Customs Cooperation Council.
24. The Fourth Schedule to the EACCMA provides for six valuation methods which are said to be identical to those suggested by the WTO Agreement and which are used for determination of customs value of imported goods liable to ad valorem Import duty; these methods are: -
“a. Transaction value method.
b. Transaction value of identical goods method.
c. Transaction value of similar goods method.
d. Deductive value method.
e. Computed valued Method; and
f. Fall back value method.”
25. The six methods of valuation of customs duty of imported goods must be applied sequentially, beginning with the Transaction value method, which is the price actually paid or payable for goods when sold for export.
26. The Fourth Schedule further provides for conditions to be adhered to when seeking to apply any specific method, and where such conditions are absent or have not been met by a taxpayer, then the next sequential method is to be considered.
27. On the Current Retail Selling Price question, it has been sworn that in an ideal situation, the transactional value method is used to determine the customs value of imported goods which is the price actually paid or payable for the goods when sold for export. Where the said method cannot be applied owing to the conditions laid down for use of the said method, the other methods are applied sequentially.
28. For used or second-hand motor vehicles, the application of Transactional Value method has not been ideal for the reasons that: -
“a. The Motor vehicles have been used overseas prior to importation.
b. The value of the motor vehicles will normally alter between the date of purchase and its importation into the Country owing to addition of accessories, fittings, major restoration, modifications or improvements.
c. Sufficient and reliable information is not available to Customs and Border Control.
d. The motor vehicles have considerably depreciated due to use overseas.
e. The motor vehicles are at times purchased for a nominal price.”
29. Accordingly, it has not been possible to apply the transactional value method to determine the customs value of a used or second-hand motor vehicle. It has also been impossible to apply the transactional value of identical goods method, or similar goods method as it is not possible to locate second hand or used motor vehicles with identical or similar degree of use, age, wear and tear etc.
30. Consequently, the fall-back method has been the most ideal method for the Commissioner to use to determine the customs value of a used or second-hand motor vehicle, which method is also recommended by the World Customs Organization.
31. Under the fall-back value method, the Customs value is based on the value of a brand-new motor vehicle when sold in Kenya less an amount for loss of value due to the usage or depreciation, the profit margin and taxes paid in Kenya. In Kenya, the value of a brand-new motor vehicle is commonly referred to as the “Current Retail Selling Price- CRSP. The CRSP being the value of a brand-new motor vehicle when sold in Kenya, the same is technically determined based on the vehicle, make, model and trim levels.
32. In order to obtain the information on the CRSP, the Commissioner of Customs calls for information from stakeholders such as the local franchise holders who furnish the Commissioner with the values from the official dealers. The call for information from the franchise holders not only provides for an accurate, fair, logical and reasonable assessment of the customs value of a new motor vehicle but also an inclusive method of determining the customs value of a new motor vehicle.
33. The call for information from franchise holders is premised on the provisions of Paragraph 8 (2) (c) of the Fourth Schedule to the EACCMA which bars the Commissioner from applying the price of goods on the domestic market of the country of exportation. under Paragraph 8 (2) (c) of the Fourth Schedule to the EACCMA, the Commissioner of Customs must derive the CRSP from local franchise holders who can scientifically determine the customs value of a new motor vehicle when sold in Kenya. The value of a new motor vehicle is determined scientifically based on the costs of production of a unit which comprises of the manufacturing cost, administrative cost, and operating expenses of the manufacturer which makes up the Free On-Board value of the vehicle.
34. A franchise dealer in Kenya would then load to the unit with costs of freight, insurance, clearance charges, taxes, operating costs and a reasonable mark-up to arrive at the customs value of new motor vehicle when sold in Kenya.
35. According to the respondents, it is best practice to ensure that the CRSP or any other method of valuation of imported vehicles is updated regularly to align the same with the provisions of the Fourth Schedule and the economic realities existing at any particular period of time.
36. Orondo has been informed by his counsel, which information he verily believes to be true, that since the customs value of a new motor vehicle when sold in Kenya is determined scientifically, the public participation in providing comments is open to the public, but the process of reviewing the said system is limited to persons who can scientifically determine the customs value of a new motor vehicle when sold in Kenya. He also believes his counsel’s information to the effect that, in the circumstances of the conditions set out under the Fourth Schedule to the EACCMA, adequate public participation was undertaken prior to coming up with the new CRSP 2025 version.
37. The CSRP system values formulae are calculated as a sum of the following:
“a. Value of the Vehicle (Japanese year book as source)
b. Import duty at 35%
c. Excise duty (20%, 25%, 35%) depending on the engine capacity of the car
d. VAT 16%
e. Profit Margin at 25%”
38. The said formulae are applicable on all the motor vehicles that are part of the CRSP, that is both low- and high-end motor vehicles, ensuring uniformity in the determination of the import duty payable for all imported motor vehicles. The use of the formulae in computation of CRSP values ensures transparency, consistency, predictability, uniformity and certainty of taxes payable on imported used motor vehicles.
39. On why the new CRSP is necessary, it has been sworn that the current CRSP list has been in use since 2019 without the regular yearly update to accommodate new models and to reflect on the prevailing economic situation, among them, the exchange rate fluctuations, Import duty and Excise duty changes. The 2019 CRSP list is alleged not to have most of the models coming into the country and which necessitated valuation decisions or rulings to be issued; this has, in turn, led to disputes.
40. The 7-year lapse between the CRSP 2019 and the new CRSP 2025 explains the notable differences in pricing and import duty values in view of the consideration of time between the last revisions and the changes in existing economic factors such as inflation, changes in prices of the new vehicle models, tax rates et al.
41. Orondo has also set out court cases that have been lodged before disputing the review of CRSP system. In Petition Number 190 of 2018, for instance, on or around 30 January 2018, the Commissioner published the CRSP values of used imported motor vehicles which took effect on 5 February, 2018. The petitioner filed the petition which was registered as Car Importers Association of Kenya versus Kenya Revenue Authority & 3 others. The court determined the petition on 16 October 2019 in favour of the petitioner but the decision is subject of appeal before the Court of Appeal. In the said judgment, the court held, among other things, that the CRSP values of used imported motor vehicles could not be implemented because the same had not been subjected to public participation, in violation of articles 10 and 47 of the Constitution. The court also directed the existing CRSP continue to apply until such a time as the Commissioner of Customs would establish CRSP values in accordance with the law. This was to be done within twelve months from the date of the judgement of the court.
42. In Petition no. 45 of 2020, the background was that following the changes in the Excise Duty Rates in the June of that year’s budget, the respondents’ felt that the changes will gradually affect the Current Retail Prices of New Motor vehicles after the stock of the motor vehicles imported under the affected duty rates. The 1st respondent wrote to various stakeholders on 27 January 2020 and 20 January 2020 requesting them for their Current Retail Price list. In the month of February 2020, the respondents started following up on the responses although the process was slowed down by unforeseen effect of Covid-19 Pandemic. From about mid of February 2020 to March 2020 and part of April, 2020, the respondents continued updating the CRSP database in preparation of draft CRSP.
43. The 1st respondent uploaded the Draft CRSP with the data collected from the local new motor vehicle dealers on the 2nd respondent’s website in preparation for public participation on 20 April 2020 and did a Simba broadcast the following day where the 1st respondent received objection from Car Importers Association of Kenya. The petitioners again filed a suit, being Mombasa High Court Petition No. 45 of 2020, challenging the implementation of the new draft CRSP 2020, and an interim application seeking conservatory orders pending the hearing of the petition. This Honourable Court granted the petitioners interim orders in the said petition No. 45 of 2020.
44. Since the issuance of the interim orders in Constitutional Petition No. 45 of 2020 stopping the respondents from reviewing the CRSP system, the matter has never been heard to date. Consequently, the existing guidelines for valuation of imported motor vehicles in Kenya have never been reviewed since the CRSP 2017 which presents various challenges in valuation of newer models of motor vehicles.
45. Concerning the question of public participation, it has been sworn on behalf of the respondents that to actualize the development of a current and updated system of valuation of imported used motor vehicles, the 1st respondent sent out invitations to various stakeholders on 15 May 2024, including the petitioner, for an engagement on 20 May 2024 at the Kenya School of Revenue Administration.
46. The respondents’ invitation was in compliance with article 47 of the Constitution, the Fair Administrative Actions Act, and other laws on public participation, and specifically, the High Court judgement in Mombasa High Court Constitutional Petition No. 90 of 2018: Car Importers Association of Kenya vs Kenya Revenue Authority and 3 Others.
47. On 16 May 2024, the 1st respondent issued a public notice title “Public Participation on Valuation of Used Motor Vehicles” through its website inviting views from the Public and other stakeholders informing them of the following: -
“a. The Respondent was conducting public participation to obtain views on the Free On-Board values for used motor vehicles before implementation of a new motor vehicle valuation database.
b. The Respondent was conducting engagement sessions with the motor vehicle importers value chain, the general public and any other interested party and are encouraged to send submissions and feedback.
c. The Public was notified of where to channel their feedback, which are to do so by 15th June 2024 (hence the public was given a period of one month within which to tender their feedback).”
48. On 16 May 2024, the petitioners through its letter of even date, objected to its members’ participation in the public participation process called by the Respondents citing various erroneous allegations of unfair representation, particular, that the petitioner’s members had 5 slots while their competitors had 22 slots. They also complained of lack of involvement of Kenya Bureau of Standards (KEBS).
49. The respondents clarified to the Petitioners on the intended public participation process vide their letter dated 17 May 2024 stating that the purpose of the planned engagement was a public participation process to seek views to guide the process of CRSP review in line with the Constitution; and that the process did not entail voting on issues but was only concerned with stakeholder deliberations. The respondents also explained that the CRSP process review is within the Respondent’s mandate under section 122 as read together with the Fourth Schedule to EACCMA. Finally, the Kenya Revenue Authority was aware of and was seeking to comply with the judgment in Mombasa Constitutional Petition No. 190 of 2018.
50. On 17 May 2024, the petitioners responded to the respondent’s letter of even date declining to participate in the public participation process citing the issues previously responded to by the respondents. On 21 May 2024, the petitioner wrote to the 1st respondent directing the respondent to cancel the public participation process within seven days or else be sued. This they did without giving an alternative or a way forward.
51. The 1st respondent responded vide its letter of 24 May 2024 clarifying the following to the Petitioner:
“a. The Public participation process to which the Petitioners were invited to was the initial stage where Key stakeholders including the Petitioners were invited to deliberate on the way forward.
b. The Respondents intend on carrying out more engagements to obtain views from different stakeholders and the Public.
c. The Petitioners and Kenya Auto Bazaar Association were given 5 slots each since the two institutions are umbrella organizations for dealers of used motor vehicles.
d. Review of valuation of used motor vehicles was in initial stages and the Petitioners, and other Key stakeholders’ input is sought to underscore the importance of each contribution in the interest of having an agreeable approach towards achieving an accepted guide for valuation of used Motor vehicles.
e. KEBS is a key stakeholder in enforcing the quality standards and not the valuation review process under EACCMA.
f. CRSP has not been reviewed from 2019.
g. Rulings issued for motor vehicles not in the 2019 CRSP are guided by section 122 as read together with the Fourth Schedule to EACCMA.
h. The review of Depreciation rates and increase of import duty rates in the Common External Tariff to 35% was done at the EAC Partner States level by the Secretariat”.
52. The Respondents successfully held the public participation forum on 20 May 2024. In a bid to stop the whole process, the petitioners filed a petition before this Honourable Court on 4 June 2024 seeking to, inter alia, halt the public participation process, on the allegations that the same was in breach of various articles of the Constitution. Contemporaneous with the petition, the petitioners filed an interim application seeking conservatory orders to suspend the public participation process pending hearing and determination of the petition. This was in Petition no. E027 of 2024. Vide a ruling dated 16 July 2024, this Honourable Court declined to issue the conservatory orders, and, in particular, held that:
“a. That the public participation exercise that began in 2024 was in compliance with the order in the judgement rendered by Hon. Ogola J. in Petition No. 190 of 2018.
b. It is not in the public interest for the Court to stop an exercise that is mandated by the Constitution itself and is long overdue from the perspective of the judgment dated 16 October 2019.
c. The respondents are prepared and ready to repeat the exercise for the Mombasa County stakeholders such as the petitioner, even as it carries out the exercise in other Counties in the Republic of Kenya.”
53. The Court thereafter directed the respondents to carry out public participation on the proposed new method valuing imported second hand motor vehicles and present a report to Court on the said public participation process. The 1st respondent filed a report in Court on the public participation conducted vide a replying affidavit dated 30 October 2024. Consequently, the petitioners withdrew the petition vide a Notice of Withdrawal dated 3 February 2025.
54. In compliance with the court order in Petition No. 190 of 2018 and Petition No. E027 of 2024, the respondents held various stakeholder engagements on 20 May 2024, 26 September 2024 and 16 Oct 2024. This was preceded by the publication of notices of the intention by the 1st respondent to review the valuation methodology for used motor vehicles. The public notices were circulated through the Daily Nation, The Star, The people’s Daily and the Standard on 5 August 2024, as well as the Kenya Revenue Authority’s social media platforms
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1. The petitioner in amended petition has been described as “a legal corporate individual incorporated under the Societies Act, Cap 108 - Laws of Kenya operating business in Kenya and having its registered offices in Mombasa.” The amended petition is dated 4 July 2025 and, in the main, it seeks the following orders:
“a) A declaration that the 1st Respondent''s publication and intended implementation of the new Current Retail Selling Price (CRSP) values for used imported motor vehicles, scheduled to take effect on 1ˢᵗ July 2025, without conducting meaningful public participation, violates the Constitution and the Fair Administrative Action Act, 2015.
b) A declaration that the Respondents'' failure to consult the Petitioner and other stakeholders, and their subsequent unilateral publication of new CRSP values, contravenes the principles of good governance, accountability, transparency, and public participation under Articles 10, 47, 118, 201 and 232 of the Constitution of Kenya, 2010.
c) A declaration that the Respondents have violated the Petitioner''s and its members'' right to fair administrative action under Article 47 of the Constitution of Kenya, 2010 and Section 4 of the Fair Administrative Action Act, 2015 by failing to give prior notice, reasons, methodology, or opportunity to be heard before implementing the new CRSP values.
d) A declaration that the Respondents'' omission of numerous motor vehicle models from the new CRSP schedule, and the resulting exposure of importers to arbitrary valuation by customs officers, constitutes a breach of the rule of law, equality before the law, and opens the door to abuse, corruption, and unfair administrative action.
e) An order directing the Respondents to apply the World Trade Organization (WTO) customs valuation methods provided under the Fourth Schedule of the WTO Agreement, as read together with the East African Community Customs Management Act, 2004 as corroborated by the invoice value and the bank transfer value of such units for all motor vehicle models not listed in the 2019 CRSP Schedule, in order to ensure transparency, consistency, and predictability in motor vehicle valuation and avoid the numerous rulings.
f) Such further orders or directions as this Honourable Court shall deem just and appropriate in the circumstances of this case in the interest of justice.
g) Costs of the petition be awarded to the Petitioner.”
2. Alongside the petition is an application by way of a motion, dated 20 June 2025, seeking conservatory orders. The application is expressed to be brought under articles 22, 23, 47 and 165 of the Constitution, and, rules 23 and 24 of the Constitution of Kenya (Protection of Rights and Fundamental Freedoms) Practice and Procedure Rules, 2013. The prayers in the motion are as follows:
“1. That this application be certified as urgent and service of the same upon the Respondents be dispensed with in the first instance.
2. That pending the hearing and determination of this application, the Honourable Court be pleased to issue a conservatory order suspending the public notice issued by the Kenya Revenue Authority (KRA) dated 30ᵗʰ July, 2025 to the effect that the 2025 Current Retail Selling Price (CRSP) Schedule will take effect on 1st July, 2025.
3. That pending the hearing and determination of the petition filed herein, the Honourable Court be pleased to issue a conservatory order suspending the public notice issued by the Kenya Revenue Authority (KRA) dated 30ᵗʰ July, 2025 to the effect that the 2025 Current Retail Selling Price (CRSP) Schedule will take effect on 1ˢᵗ July, 2025.
4. That the costs of this application be provided for.”
It is this application that the court is concerned about.
3. The application is supported by the affidavit of Peter Otieno, who has identified himself in the affidavit as the National Chairman of the petitioner. He has sworn that the petitioner has filed the petition on its own behalf and on behalf of its 73 members and who import and sell in Kenya new and used motor vehicles.
4. For the purposes of enabling the petitioner’s members and other motor vehicle dealers, and also clearing and forwarding agents to calculate the import duty payable upon importing motor vehicle units, the 1st respondent publishes the "Current Retail Selling Price" (or “the CRSP").
5. The petitioner is said to have a significant interest in the determination of CRSP values because any hikes in duty adversely affect its members by inflating the final selling price of the vehicles, thereby reducing motor vehicle sales.
6. On 30 May, 2025, the 1st respondent published a new CRSP schedule (or “the 2025 Schedule”), set to take effect from 1July, 2025, for use in assessing the customs value of used imported motor vehicles and for computing tax obligations such as Import Duty, VAT, Excise Duty, and Import Declaration Fees.
7. It is alleged that the new CRSP schedule was developed unilaterally and disseminated without engaging the public or industry stakeholders in any manner consistent with the Constitution. Accordingly, the 1st respondent''s actions violated Articles 10, 47, and 201 of the Constitution which require public participation, fair administrative action, and openness in financial matters.
8. The Petitioner has previously challenged a similar breach in Mombasa High Court Constitutional Petition No. 190 of 2018; Car Importers Association of Kenya versus Kenya Revenue Authority & 3 Others, where the High Court declared a previous CRSP schedule unlawful for want of public participation. The Court also directed the 1ˢᵗ respondent to ensure that future CRSP publications were subject to public scrutiny and stakeholder input within a period of 12 months from the date of the said judgment. The respondents are yet to comply with the court order. The current CRSP values are alleged to be tainted with the same procedural deficiencies declared unlawful in the 2019 judgment, demonstrating the 1ˢᵗ respondent''s blatant disregard of judicial authority. Contrary to the 1st respondent’s allegations, any consultations conducted with respect to the current CRSP values were informal, exclusive, and inaccessible to the public. In particular, “there were no published methodologies, justification papers, or impact assessments.”
9. According to the petitioners, the newly published CRSP schedule omits a significant number of commonly imported vehicle models and what it has described as “trim variants”, thereby exposing vehicle importers to arbitrary, unpredictable, and potentially inflated tax assessments. The absence of these models from the official list grants undue discretion to customs officers and undermines the objectivity and consistency that the CRSP is meant to guarantee.
10. The effect of the new CRSP regime is not merely economically regressive but also structurally exclusionary, in that it disproportionately targets vehicles most commonly purchased by low- and middle-income earners while appearing to shield high-end luxury vehicles from similar tax escalation.
11. The implementation of the new CRSP values, in its current form, is tone-deaf to the economic realities facing the majority of Kenyans and is contrary to the constitutional principles of equity, fairness, inclusivity, and socio-economic justice. It entrenches inequality by rendering essential tools of mobility and economic survival accessible only to the wealthy elite.
12. According to the petitioners, the taxation policies should be guided by economic rationality and social equity, shielding vulnerable populations from disproportionate burdens and imposing progressive obligations on those with greater means. However, the new CRSP regime offends this logic because vehicles that are not only essential but indispensable to daily life and income generation for the common citizens such as the Toyota Vitz, Mazda Demio, and Suzuki Swift have seen dramatic and punitive spikes in tax rates, while luxury vehicles like the Lexus LX570 and Volkswagen Tiguan, associated with upper-class affluence, have enjoyed tax reductions.
13. It is contended that the actions and omissions of the respondents have violated the petitioner''s constitutional rights, particularly the right to fair administrative action under article 47(1) of the Constitution by publishing and implementing the 2025 CRSP values without following a transparent, accountable, and procedurally fair process. The petitioner and other stakeholders were neither adequately consulted nor afforded a reasonable opportunity to influence the outcome of a policy that has direct, far-reaching economic consequences.
14. The petitioner also alleges that the respondents have violated the petitioner’s right to public participation as enshrined in articles 10(2)(a), 118(1)(b), 201(a) and 232(1)(d) of the Constitution, by excluding the petitioner and other key stakeholders from the formulation and finalisation of the 2025 CRSP values. It is their case that no meaningful engagement was conducted, and the feedback, apparently submitted by the petitioner was either ignored or selectively applied.
15. Public participation, it is sworn, is not optional. It is a constitutional imperative under article 10(2)(a) of the Constitution and a precondition to the legitimacy of policy decisions. The 1ˢᵗ respondent''s failure to comply with this obligation renders the CRSP schedule constitutionally infirm and administratively void.
16. The respondents opposed the application and a replying affidavit to this end has been sworn by Frank Orondo who has sworn that he is an officer appointed under section 13 of the Kenya Revenue Authority Act, cap.469 and currently deployed to 2nd respondent’s Valuation and Tariff Unit of the Customs and Border Control Department. Accordingly, he is conversant with the actions giving rise to the petitioner’s petition.
17. The 1st respondent’s Valuation and Tariff Unit, is charged with implementing various revenue statutes including the East African Community Customs Management Act, 2004 and the attendant Regulations. Part of the mandate of the valuation unit of the 2nd respondent includes determination of and implementation of valuation regulations for motor vehicles in Kenya.
18. It is contended that Kenya Revenue Authority is established under the Kenya Revenue Authority Act, and that under Section 5 (1) thereof, the Authority is an agency of the Government for the collection and receipt of all revenue. Further, under Section 5 (2) of the Act, with respect to the performance of its functions under subsection (1), the Authority is required to administer and enforce all provisions of the written laws set out in Part 1 and 2 of the First Schedule to the Act for the purposes of assessing, collecting and accounting for all revenues in accordance with those laws. And under Part I of the First Schedule to the Act, the 1st respondent is mandated to enforce the provisions of the East African Community Customs Management Act, 2004.
19. As far as the question of customs valuation of imported and used motor vehicles is concerned, it is sworn that the rules of customs valuation of goods are necessary to regulate and provide certainty of international trade to exporters, importers and Governments. The World Trade Organization (or “the WTO”) was formed by member countries and is mandated to, inter alia, operate the global system of trade rules and helps developing economies build their trade capacity.
20. The WTO Agreement on implementation of Article VII of the General Agreement on Tariffs and Trade 1994 (or “the WTO Agreement”) on Customs valuation, aims for a fair, uniform and neutral system for the valuation of goods for customs purposes, a system that conforms to commercial realities, and which outlaws the use of arbitrary or fictitious customs values. Part I of the WTO agreement provides for the rules of Customs valuation, which rules provide for the valuations methods to be used by partner states in the determination of customs value of imported goods.
21. Article 1 of the WTO Agreement Rules on Customs Valuation provides for the primary basis of valuation of custom goods to be based on transaction value, that is the price actually paid or payable for the goods when sold for export to the country of importation adjusted in accordance with the provisions of Article 8.
22. In compliance in compliance with the WTO agreement, the Partner states to the East African Community have enacted and implemented the East African Customs Community Management Act, which, inter alia, includes the rules on Customs valuation as provided for under the WTO agreement. Section 122 of the EACCMA provides that where imported goods are liable to import duty ad valorem, the value of such goods shall be determined in accordance with the Fourth Schedule to the Act and import duty shall be paid on that value.
23. Section 122(6) of EACCMA provides that when applying or interpreting the said section and the provisions of the Fourth Schedule, due regard shall be taken of the decisions, rulings, opinions, guidelines and interpretations given by the Directorate, the World Trade Organization of the Customs Cooperation Council.
24. The Fourth Schedule to the EACCMA provides for six valuation methods which are said to be identical to those suggested by the WTO Agreement and which are used for determination of customs value of imported goods liable to ad valorem Import duty; these methods are: -
“a. Transaction value method.
b. Transaction value of identical goods method.
c. Transaction value of similar goods method.
d. Deductive value method.
e. Computed valued Method; and
f. Fall back value method.”
25. The six methods of valuation of customs duty of imported goods must be applied sequentially, beginning with the Transaction value method, which is the price actually paid or payable for goods when sold for export.
26. The Fourth Schedule further provides for conditions to be adhered to when seeking to apply any specific method, and where such conditions are absent or have not been met by a taxpayer, then the next sequential method is to be considered.
27. On the Current Retail Selling Price question, it has been sworn that in an ideal situation, the transactional value method is used to determine the customs value of imported goods which is the price actually paid or payable for the goods when sold for export. Where the said method cannot be applied owing to the conditions laid down for use of the said method, the other methods are applied sequentially.
28. For used or second-hand motor vehicles, the application of Transactional Value method has not been ideal for the reasons that: -
“a. The Motor vehicles have been used overseas prior to importation.
b. The value of the motor vehicles will normally alter between the date of purchase and its importation into the Country owing to addition of accessories, fittings, major restoration, modifications or improvements.
c. Sufficient and reliable information is not available to Customs and Border Control.
d. The motor vehicles have considerably depreciated due to use overseas.
e. The motor vehicles are at times purchased for a nominal price.”
29. Accordingly, it has not been possible to apply the transactional value method to determine the customs value of a used or second-hand motor vehicle. It has also been impossible to apply the transactional value of identical goods method, or similar goods method as it is not possible to locate second hand or used motor vehicles with identical or similar degree of use, age, wear and tear etc.
30. Consequently, the fall-back method has been the most ideal method for the Commissioner to use to determine the customs value of a used or second-hand motor vehicle, which method is also recommended by the World Customs Organization.
31. Under the fall-back value method, the Customs value is based on the value of a brand-new motor vehicle when sold in Kenya less an amount for loss of value due to the usage or depreciation, the profit margin and taxes paid in Kenya. In Kenya, the value of a brand-new motor vehicle is commonly referred to as the “Current Retail Selling Price- CRSP. The CRSP being the value of a brand-new motor vehicle when sold in Kenya, the same is technically determined based on the vehicle, make, model and trim levels.
32. In order to obtain the information on the CRSP, the Commissioner of Customs calls for information from stakeholders such as the local franchise holders who furnish the Commissioner with the values from the official dealers. The call for information from the franchise holders not only provides for an accurate, fair, logical and reasonable assessment of the customs value of a new motor vehicle but also an inclusive method of determining the customs value of a new motor vehicle.
33. The call for information from franchise holders is premised on the provisions of Paragraph 8 (2) (c) of the Fourth Schedule to the EACCMA which bars the Commissioner from applying the price of goods on the domestic market of the country of exportation. under Paragraph 8 (2) (c) of the Fourth Schedule to the EACCMA, the Commissioner of Customs must derive the CRSP from local franchise holders who can scientifically determine the customs value of a new motor vehicle when sold in Kenya. The value of a new motor vehicle is determined scientifically based on the costs of production of a unit which comprises of the manufacturing cost, administrative cost, and operating expenses of the manufacturer which makes up the Free On-Board value of the vehicle.
34. A franchise dealer in Kenya would then load to the unit with costs of freight, insurance, clearance charges, taxes, operating costs and a reasonable mark-up to arrive at the customs value of new motor vehicle when sold in Kenya.
35. According to the respondents, it is best practice to ensure that the CRSP or any other method of valuation of imported vehicles is updated regularly to align the same with the provisions of the Fourth Schedule and the economic realities existing at any particular period of time.
36. Orondo has been informed by his counsel, which information he verily believes to be true, that since the customs value of a new motor vehicle when sold in Kenya is determined scientifically, the public participation in providing comments is open to the public, but the process of reviewing the said system is limited to persons who can scientifically determine the customs value of a new motor vehicle when sold in Kenya. He also believes his counsel’s information to the effect that, in the circumstances of the conditions set out under the Fourth Schedule to the EACCMA, adequate public participation was undertaken prior to coming up with the new CRSP 2025 version.
37. The CSRP system values formulae are calculated as a sum of the following:
“a. Value of the Vehicle (Japanese year book as source)
b. Import duty at 35%
c. Excise duty (20%, 25%, 35%) depending on the engine capacity of the car
d. VAT 16%
e. Profit Margin at 25%”
38. The said formulae are applicable on all the motor vehicles that are part of the CRSP, that is both low- and high-end motor vehicles, ensuring uniformity in the determination of the import duty payable for all imported motor vehicles. The use of the formulae in computation of CRSP values ensures transparency, consistency, predictability, uniformity and certainty of taxes payable on imported used motor vehicles.
39. On why the new CRSP is necessary, it has been sworn that the current CRSP list has been in use since 2019 without the regular yearly update to accommodate new models and to reflect on the prevailing economic situation, among them, the exchange rate fluctuations, Import duty and Excise duty changes. The 2019 CRSP list is alleged not to have most of the models coming into the country and which necessitated valuation decisions or rulings to be issued; this has, in turn, led to disputes.
40. The 7-year lapse between the CRSP 2019 and the new CRSP 2025 explains the notable differences in pricing and import duty values in view of the consideration of time between the last revisions and the changes in existing economic factors such as inflation, changes in prices of the new vehicle models, tax rates et al.
41. Orondo has also set out court cases that have been lodged before disputing the review of CRSP system. In Petition Number 190 of 2018, for instance, on or around 30 January 2018, the Commissioner published the CRSP values of used imported motor vehicles which took effect on 5 February, 2018. The petitioner filed the petition which was registered as Car Importers Association of Kenya versus Kenya Revenue Authority & 3 others. The court determined the petition on 16 October 2019 in favour of the petitioner but the decision is subject of appeal before the Court of Appeal. In the said judgment, the court held, among other things, that the CRSP values of used imported motor vehicles could not be implemented because the same had not been subjected to public participation, in violation of articles 10 and 47 of the Constitution. The court also directed the existing CRSP continue to apply until such a time as the Commissioner of Customs would establish CRSP values in accordance with the law. This was to be done within twelve months from the date of the judgement of the court.
42. In Petition no. 45 of 2020, the background was that following the changes in the Excise Duty Rates in the June of that year’s budget, the respondents’ felt that the changes will gradually affect the Current Retail Prices of New Motor vehicles after the stock of the motor vehicles imported under the affected duty rates. The 1st respondent wrote to various stakeholders on 27 January 2020 and 20 January 2020 requesting them for their Current Retail Price list. In the month of February 2020, the respondents started following up on the responses although the process was slowed down by unforeseen effect of Covid-19 Pandemic. From about mid of February 2020 to March 2020 and part of April, 2020, the respondents continued updating the CRSP database in preparation of draft CRSP.
43. The 1st respondent uploaded the Draft CRSP with the data collected from the local new motor vehicle dealers on the 2nd respondent’s website in preparation for public participation on 20 April 2020 and did a Simba broadcast the following day where the 1st respondent received objection from Car Importers Association of Kenya. The petitioners again filed a suit, being Mombasa High Court Petition No. 45 of 2020, challenging the implementation of the new draft CRSP 2020, and an interim application seeking conservatory orders pending the hearing of the petition. This Honourable Court granted the petitioners interim orders in the said petition No. 45 of 2020.
44. Since the issuance of the interim orders in Constitutional Petition No. 45 of 2020 stopping the respondents from reviewing the CRSP system, the matter has never been heard to date. Consequently, the existing guidelines for valuation of imported motor vehicles in Kenya have never been reviewed since the CRSP 2017 which presents various challenges in valuation of newer models of motor vehicles.
45. Concerning the question of public participation, it has been sworn on behalf of the respondents that to actualize the development of a current and updated system of valuation of imported used motor vehicles, the 1st respondent sent out invitations to various stakeholders on 15 May 2024, including the petitioner, for an engagement on 20 May 2024 at the Kenya School of Revenue Administration.
46. The respondents’ invitation was in compliance with article 47 of the Constitution, the Fair Administrative Actions Act, and other laws on public participation, and specifically, the High Court judgement in Mombasa High Court Constitutional Petition No. 90 of 2018: Car Importers Association of Kenya vs Kenya Revenue Authority and 3 Others.
47. On 16 May 2024, the 1st respondent issued a public notice title “Public Participation on Valuation of Used Motor Vehicles” through its website inviting views from the Public and other stakeholders informing them of the following: -
“a. The Respondent was conducting public participation to obtain views on the Free On-Board values for used motor vehicles before implementation of a new motor vehicle valuation database.
b. The Respondent was conducting engagement sessions with the motor vehicle importers value chain, the general public and any other interested party and are encouraged to send submissions and feedback.
c. The Public was notified of where to channel their feedback, which are to do so by 15th June 2024 (hence the public was given a period of one month within which to tender their feedback).”
48. On 16 May 2024, the petitioners through its letter of even date, objected to its members’ participation in the public participation process called by the Respondents citing various erroneous allegations of unfair representation, particular, that the petitioner’s members had 5 slots while their competitors had 22 slots. They also complained of lack of involvement of Kenya Bureau of Standards (KEBS).
49. The respondents clarified to the Petitioners on the intended public participation process vide their letter dated 17 May 2024 stating that the purpose of the planned engagement was a public participation process to seek views to guide the process of CRSP review in line with the Constitution; and that the process did not entail voting on issues but was only concerned with stakeholder deliberations. The respondents also explained that the CRSP process review is within the Respondent’s mandate under section 122 as read together with the Fourth Schedule to EACCMA. Finally, the Kenya Revenue Authority was aware of and was seeking to comply with the judgment in Mombasa Constitutional Petition No. 190 of 2018.
50. On 17 May 2024, the petitioners responded to the respondent’s letter of even date declining to participate in the public participation process citing the issues previously responded to by the respondents. On 21 May 2024, the petitioner wrote to the 1st respondent directing the respondent to cancel the public participation process within seven days or else be sued. This they did without giving an alternative or a way forward.
51. The 1st respondent responded vide its letter of 24 May 2024 clarifying the following to the Petitioner:
“a. The Public participation process to which the Petitioners were invited to was the initial stage where Key stakeholders including the Petitioners were invited to deliberate on the way forward.
b. The Respondents intend on carrying out more engagements to obtain views from different stakeholders and the Public.
c. The Petitioners and Kenya Auto Bazaar Association were given 5 slots each since the two institutions are umbrella organizations for dealers of used motor vehicles.
d. Review of valuation of used motor vehicles was in initial stages and the Petitioners, and other Key stakeholders’ input is sought to underscore the importance of each contribution in the interest of having an agreeable approach towards achieving an accepted guide for valuation of used Motor vehicles.
e. KEBS is a key stakeholder in enforcing the quality standards and not the valuation review process under EACCMA.
f. CRSP has not been reviewed from 2019.
g. Rulings issued for motor vehicles not in the 2019 CRSP are guided by section 122 as read together with the Fourth Schedule to EACCMA.
h. The review of Depreciation rates and increase of import duty rates in the Common External Tariff to 35% was done at the EAC Partner States level by the Secretariat”.
52. The Respondents successfully held the public participation forum on 20 May 2024. In a bid to stop the whole process, the petitioners filed a petition before this Honourable Court on 4 June 2024 seeking to, inter alia, halt the public participation process, on the allegations that the same was in breach of various articles of the Constitution. Contemporaneous with the petition, the petitioners filed an interim application seeking conservatory orders to suspend the public participation process pending hearing and determination of the petition. This was in Petition no. E027 of 2024. Vide a ruling dated 16 July 2024, this Honourable Court declined to issue the conservatory orders, and, in particular, held that:
“a. That the public participation exercise that began in 2024 was in compliance with the order in the judgement rendered by Hon. Ogola J. in Petition No. 190 of 2018.
b. It is not in the public interest for the Court to stop an exercise that is mandated by the Constitution itself and is long overdue from the perspective of the judgment dated 16 October 2019.
c. The respondents are prepared and ready to repeat the exercise for the Mombasa County stakeholders such as the petitioner, even as it carries out the exercise in other Counties in the Republic of Kenya.”
53. The Court thereafter directed the respondents to carry out public participation on the proposed new method valuing imported second hand motor vehicles and present a report to Court on the said public participation process. The 1st respondent filed a report in Court on the public participation conducted vide a replying affidavit dated 30 October 2024. Consequently, the petitioners withdrew the petition vide a Notice of Withdrawal dated 3 February 2025.
54. In compliance with the court order in Petition No. 190 of 2018 and Petition No. E027 of 2024, the respondents held various stakeholder engagements on 20 May 2024, 26 September 2024 and 16 Oct 2024. This was preceded by the publication of notices of the intention by the 1st respondent to review the valuation methodology for used motor vehicles. The public notices were circulated through the Daily Nation, The Star, The people’s Daily and the Standard on 5 August 2024, as well as the Kenya Revenue Authority’s social media platforms
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