Dar es Salaam. The Tanzania Revenue Authority (TRA) commented on the increased costs of some imported used vehicles in early January 2021, saying this was the result of a routine appraisal process based on the current real value of vehicles on the global market.
TRA said it normally reviews tariffs every three months to update vehicle pricing data. This can lead to higher or lower rates, depending on the market prices of the vehicles.
The authority said it was visiting sources, including websites, from companies selling vehicles for updates.
TRA’s director of taxpayer services and education, Richard Kayombo, told the Citizen that the tax paid on imported used vehicles is calculated on the used motor vehicle valuation system, a online portal managed by the authority.
“When we update the assessed values for used motor vehicles, the fees change. For some vehicles the tax can go up, while for some it can go down, thus affecting price levels, ”he said.
Mr Kayombo said the TRA also levies excise duty based on age, with a vehicle’s age calculated based on the calendar year. For example, passenger cars between the ages of eight and nine are subject to an excise tax of 15% while for a car over the age of 9, it is charged at 30%.
“This means that if you ordered a private used car for nine years in 2020 and it arrives in Tanzania in 2021, it will be charged at 30% and not 15%, which was supposed to be the rate if the car arrived in the same year 2020.
“For this reason, importers of cars of the same age who ordered cars in 2020 and arrived in 2021, it is clear that there would be an increase in the tax,” he said.
According to a TRA statement to Mwananchi, the vehicle valuation system complies with the country’s regulations and prices are posted on the authority’s website to help importers calculate the amount of tax they should pay once the vehicle has reached the country.
The update of the (customs CIF value) for imported used cars has raised concerns among stakeholders, especially dealers and retailers who have claimed that the tax change caused by this update could affect their activities.
“For cars like IST whose CIF was valued at $ 1,800, it is now at $ 2,500 – which means its tax is increasing as the taxable price would have increased,” said Hendh Razack, a car dealership in the city. .
Saidi Anishk – another car dealership – said he started noticing price changes since the start of this year, which worried retailers.