Excise duty on imported cars in Kenya is one of the key taxes you must pay before your vehicle can be cleared from the Port of Mombasa. It is calculated as a percentage of the customs value (CIF – Cost, Insurance, and Freight) of the car and is charged after import duty but before VAT. The exact rate depends on the engine capacity and type of vehicle, with the aim of taxing higher-consumption and luxury vehicles more heavily.

For passenger vehicles with an engine capacity of 1500cc or below, the excise duty rate is generally 20%. For those above 1500cc, the rate goes up to 25%. Special categories of vehicles, such as electric cars, have a reduced excise rate of 10% to encourage environmentally friendly transport. Pick-up trucks and commercial vehicles often have different rates, sometimes lower than private passenger cars, due to their utility function.

It’s important to note that excise duty is compounded with other taxes. The Kenya Revenue Authority calculates it on the customs value after adding import duty, and then VAT is applied on top of that total. This means excise duty directly increases the amount of VAT you’ll pay as well. For example, if you import a vehicle valued at KES 1,000,000 CIF with a 25% excise rate, that’s KES 250,000 in excise duty—plus the extra VAT calculated on that higher total.

Because these calculations can be complex, working with a trusted import partner like Elisa Motors can save you from underestimating the total cost. Elisa Motors provides accurate duty estimates based on the KRA’s Current Retail Selling Price schedule and ensures that all documentation is correct so you avoid costly clearance delays.

FAQs

Is excise duty the same for new and used cars?
Yes, the rate is based on engine size and type, not whether the car is new or used.

Do hybrid cars pay full excise duty?
No, many hybrid models qualify for reduced rates to encourage eco-friendly imports.

Can excise duty be waived?
It can only be waived for vehicles exempted under special government provisions, such as diplomatic imports.

Does excise duty affect VAT?
Yes, because VAT is calculated after excise duty is added to the customs value.

Will Elisa Motors calculate excise duty before I buy the car?
Yes, they provide a full tax estimate so you know the exact cost before making a purchase