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The "Buy Kenya" Advantage Vanishes: Finance Act 2025 Hits Local Assemblers

Policy Desk December 12, 2025 1,890 Views

Policy Update

For years, "Buy Kenya, Build Kenya" was supported by tax breaks that kept locally assembled cars (CKD) cheaper than imports. The Finance Act 2025 has scrapped the 15% corporate tax incentive and introduced VAT on key assembly inputs.

1. The Price Shift

Dealers of locally assembled units (like the VW Tiguan Allspace and Peugeot 3008) have quietly adjusted pricelists upwards by 12-18% since July.

2. Import vs. Local: The Gap Closes

Previously, a local 2018 VW Tiguan was KSh 400k cheaper than an import. Now, with the local price hike, the gap has narrowed to virtually zero. For the buyer, this means the Import once again becomes attractive due to:

  • Higher Spec Variety (Sunroofs, R-Line trims not always available locally).
  • Better Resale Value (Japanese imports still hold value better than CKD units in the used market).

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