— Import Regulations
CIF Is Dead: Kenya's Shift to CFR Incoterms for Vehicle Imports — What Every Buyer and Dealer Must Know in 2026
As of 1st July 2026, KRA replaced CIF with CFR for vehicle import valuation. Discover how mandatory local marine insurance changes your landed cost.
As of 1st July 2026, the Kenya Revenue Authority officially retired the CIF (Cost, Insurance, and Freight) valuation method for all motor vehicle imports, replacing it with CFR (Cost and Freight).
This is not a proposal. It is active law, and it affects every vehicle clearing through the Port of Mombasa right now. At Roskyways, we have already restructured our entire landed cost engine, import documentation, and client advisory process to reflect this change.
What Changed — In Plain English
Under the old CIF system, your customs value included three components: Cost, Insurance, and Freight. KRA calculated all duties on this combined figure. Under the new CFR system, insurance is stripped out of the customs base. KRA now calculates duties on Cost and Freight only.
However, you are now required to purchase marine transit insurance locally in Kenya after submitting your Import Declaration Form (IDL) through a Kenyan-licensed insurer. The rate is approximately 1.5% of the CFR value.
Real-World Example: 2022 Toyota Land Cruiser Prado TX-L
Let's compare the systems on a 2022 Prado TX-L (2.7L Petrol, FOB $18,000, Freight $1,850, Exchange Rate KES 130/USD):
- ◆Old CIF Base: KES 2,592,200 | Total Duties & Levies: KES 2,410,746 | Total Landed: ~KES 5,002,946
- ◆New CFR Base: KES 2,580,500 | Total Duties & Levies: KES 2,399,866 | Local Insurance (1.5%): KES 38,708 | Total Landed: ~KES 5,019,074
- ◆Net Landed Price Difference: +KES 16,128
The Financial Reality
While duties dropped slightly due to the lower customs valuation base, local marine insurance premiums (1.5%) exceed old overseas insurance costs. Landed costs on standard SUVs rise by KES 15,000 to KES 60,000.
Why Did the Government Make This Change?
- 01EAC Harmonization: Standardizing customs valuations according to WTO rules.
- 02Domestic Industry Protection: Redirecting insurance premium cash flows to Kenyan insurance underwriters.
- 03Audit Verification: Enabling KRA and IRA to easily audit domestic policy certificates.
What This Means for Buyers
- ◆Your total landed cost will be slightly higher.
- ◆Insurance must be processed locally during Stage 3 of our escrow structure.
- ◆Be wary of dealers still quoting CIF-based estimates—they are outdated.
At Roskyways, our systems are updated. Our Landed Cost Engine calculates duties on CFR and adds local marine insurance dynamically. For a CFR-accurate import dossier, contact our team on +254 768 021 133.
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See our current inventory, request a specific import, or arrange a test drive at our Lavington showroom. We're here Monday to Saturday 8am–6pm and Sunday 10am–4pm.
— Frequently Asked
Quick answers
Can I skip local marine insurance?
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No. KRA requires proof of a locally purchased marine transit insurance certificate during customs clearance at Mombasa Port.
Has the import duty percentage changed?
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The underlying duty rates (Import Duty 25%, VAT 16%, IDF 2.5%, RDL 2.0%) remain the same, but they are now calculated strictly on Cost and Freight (CFR) rather than CIF.