You might think that a 2018 Toyota Land Cruiser is taxed based on its price. It isn't. It is taxed based on what is under the bonnet.
Excise Duty is often called the "Sin Tax." KRA uses your engine size (cc) to determine how "rich" you are. If you cross specific engine size thresholds, KRA moves you into a higher tax bracket, punishing you with a higher rate on an already inflated base.
1. The Three Tax Bands
Unlike Import Duty (which is a flat 35% for everyone), Excise Duty varies based on engine capacity.
| Band | Engine Size | Rate | Common Cars |
|---|---|---|---|
| Band A (Budget) | < 1500cc | 20% | Demio, Vitz, Note |
| Band B (Standard) | 1500cc - 3000cc | 25% | Harrier, Forester, CX-5 |
| Band C (Luxury) | > 3000cc (Petrol) > 2500cc (Diesel) |
35% | Land Cruiser V8, Range Rover |
2. The "Cliff Edge" Risks
The difference between Band B and Band C is where buyers get destroyed. A small difference in engine size triggers a massive tax jump.
✅ The Safe Choice
Toyota Prado TX (2.7L Petrol)
Excise Duty: 25%
Result: Standard Tax.
❌ The Tax Trap
Toyota Prado VZ (4.0L Petrol)
Excise Duty: 35%
Result: Millions in extra tax.
3. The "Double Punishment"
Excise Duty is calculated after Import Duty. Because you are paying Excise Duty on top of the 35% Import Duty, jumping to the 35% Excise band increases your Total Tax Payable significantly.
Summary
- Stick to < 1500cc for maximum savings.
- Stay under 2500cc (Diesel) to avoid the "Luxury Tax."
- Check the CC: Verify if a car is 2990cc (Safe) or 3010cc (Punitive) before bidding.