KMI has released a record indicating that artels of Kenyan have cut importation orders for luxury cars like Porsche, Range Rover and Jaguar. The ongoing tax evasion scrutiny has seen a 43 percent drop in the unit sales of new vehicles generally.
Data from the Kenya Motor Industry (KMI) Association indicates that unit sales of all the high-end brands fell to 112 in a period of nine months compared to 198 the last year.
According to KMI, 444 rated cars that owning one you have to caugh out more than sh20Million importation slump is blamed on the tax evasion scrutiny from KRA and DCI, that the court has since said that they don’t have jurisdiction to handle tax related cases.
Car dealers have said that increased government scrutiny of luxury spending and large financial transactions have discouraged buyers, who apparently are involved in crooked deals from going for top-end cars.
“Tax authorities are interested in people buying luxury cars. The option of paying for cars using cash is also now closed,” said a dealer who requested not to be named.
Car registration details are being used to smoke out individuals who are driving high-end vehicles like BMW, Mercedes, Porsche and Land Rover, but have little to show in terms of taxes remitted.
The KRA has set out to raise more revenues from individuals whose lifestyles suggest they have higher incomes than what their tax payments indicate.
Porsches and Bentleys, for instance, were out of stock for four months until May in what the local dealerships attributed to delays in sourcing the 2019 models. Unit sales of Porsche dropped to 22 units, or 46.3 percent, in the review period from 41 a year earlier while those of Bentley declined to three from four.
The new model Porsche Cayenne that goes for Sh12 million, inclusive of taxes and Bentleys are sold by separate dealerships whose ultimate parent company is the logistics firm, Multiple Group.
German made BMW whose franchise was transferred from Simba Corporation to rival Inchcape Kenya early this year. BMW orders dropped to eight from 21, reflecting a 69 percent drop.
Land Rover sales, which include those of Range Rover models, dropped by half to 34 units, a drop that saw it cede its lead of the luxury car market to Mercedes.
Mercedes Dealer DT Dobie could get a major sales boost later this year considering that the Judiciary has published plans to buy 121 Mercedes cars for judges and other staff.
Jaguar suffered serious stabs, posting seven unit sales compared 21 in a similar period a year earlier.
While DT Dobie continues to benefit from State orders, most dealers depend on orders from private companies and wealthy individuals who have been avoiding government purchases after it adopted austerity measures.
