GET in a taxi in Nairobi and the dashboard will often be lit up with Japanese characters. Most of the cars that ply east Africa’s roads once had another life elsewhere, usually in Japan. As well as being right-hand drive, Japanese cars are favoured for being in better condition than other rusty hand-me-downs. Importers reckon that as many as 90% of second-hand vehicles in Kenya come from that country. Yet the booming trade is now being throttled by government intervention.
Kenya wants to boost its own fledgling auto industry, feeble though it is, so it is trying to make car imports harder. Vehicles shipped to Kenya increased by 40% to almost 110,000 a year between 2010 and 2015. But a drastic additional tax, which came into effect at the start of December, has already slashed imports by a third—bad news for buyers, and also for government coffers, which as a result of the falling numbers could end up with less cash.
A new import duty has been set at a flat rate rather than ad valorem, so it has more of an impact on smaller cars than big ones; and a higher tax is...Continue reading
Source: Middle East and Africa http://ift.tt/26xga6e
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