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Abbreviations used
- CIF – Cost Insurance Freight (Taxable Value)
- I/D – Import Duty
- EXA – Excise duty for vehicles aged more than 10 years
- EX – Excise Duty
- VAT – Value Added Tax
- CV – Cost of Vehicle
- CRP- Current Retail Price
- PM- Profit Margin
- P – Profit
- VBD – Value Before Depreciation
TAX RATES
NON - UTILITY VEHICLES C.C I/DUTY E/DUTY VAT 0-1000 25% - 18% 1001-2000 25% 5% 18% 2001 and above 25% 10% 18%
UTILITY VEHICLES ITEM I/DUTY E/DUTY VAT Pick ups 25% 18% Trucks ( 5tons-18.5tons) 10% 18% Trucks ( above 18.5tons) 0% 18% Tractors(trucks for pulling semi trailers) 0% 18% Buses (carrying from 10 passengers ) 25% 18% Land cruiser Hard tops carrying from 10 passengers 25% 18%
STEP. 1
CALCULATION OF THE COST OF MOTOR VEHICLE WITHOUT PROFIT
- P = CV*25%=CV*0.25=0.25CV
- CRP=CV+P
- CRP=CV+0.25CV
- CRP=1.25CV
- CRP/1.25=CV
STEP.2
CALCULATION TO OF PROFIT MARGIN
PM=CRP – CV
STEP.3
CALCULATION OF CIF VALUE BEFORE DEPRECIATION
We remove the tax element from Cost Value
- VBD = CV/1.25/1.18 for vehicles with less than 1000cc
- VBD = CV/1.25/1.05/1.18 for vehicles with more than 1000cc but not exceeding 2000cc
- VBD = CV/1.25/1.05/1.18 for vehicles exceeding 2000cc
STEP.4
CALCULATION OF DEPRECIATION
DEPRECIATION FOR DIRECT IMPORTS 0to <1 year 10% 1 to < 2 years 15% 2 to < 3 years 20% 3 to < 4 years 25% 4 to < 5 years 30% 5 to < 6 years 35% 6 to < 7 years 40% 7 to < 8 years 50% 8 to < 9 years 60% 9 to ≤ 10 years 70% above 10 years 75%
Depending age of the motorvehicle and basing on the given depreciation rates in the table above the depreciated value will be calculated as follows
DEPRECIATION VALUE = VBD * RATE
CALCULATION OF TAXES
a) Motovehicles with Import duty and VAT only
- I/D = CIF * 25%
- VAT = (CIF+I/D) * 18%
b) Motovehicles with Import duty and VAT but aged more than 10 years
- I/D = CIF * 25%
- EXA = (CIF+I/D) * 20%
- VAT = (CIF+I/D+EXA) * 18%
c) Motovehicles with Import duty ,Excise Duty and VAT
Vehicles with more than 1000cc but not exceeding 2000cc rate is 5% Excise duty, and those with more than 2000cc rate is 10%
- I/D = CIF * 25%
- EX = (CIF+I/D) * 5%
- VAT = (CIF+I/D+EX) * 18%
d) Motovehicles with Import duty ,Excise Duty and VAT but aged more than 10 years
Vehicles with more than 1000cc but not exceeding 2000cc rate is 5% Excise duty, and those with more than 2000cc rate is 10%
- I/D = CIF * 25%
- EXA = (CIF+I/D) * 20%
- EX = (CIF+I/D) * 5%
- VAT = (CIF+I/D+EXA+EX) * 18%
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