East Africa: How EAC Partner States Plan to Tax '10 Major Products'

5 July 2023
The New Times (Kigali)
By Emmanuel Ntirenganya

The East African Community (EAC) secretariat has issued the approved measures on import duty rates in the EAC Common External Tariff (EAC CET), which indicate different rates for given products, based on the priorities of each Partner State.

They were published in the EAC Gazette on June 30, and are expected to be applicable for the current fiscal year which runs from July 1 to June 30, 2024.

According to a legal notice in the Gazette, the measures on customs duty rates on the items in question were approved by the EAC Council of Ministers in exercise of the powers conferred upon the Council under relevant provisions of the Protocol on the Establishment of the East African Community Customs Union.

Article 12 (1) of the Protocol provides that the EAC Partner States hereby establish a three-band common external tariff with a minimum rate of 0 per cent, a middle rate of 10 per cent and a maximum rate of 25 per cent in respect of all products imported into the Community.

Again, the same article provides that the Council may review the common external tariff structure and approve measures designed to remedy any adverse effects which any of the Partner States may experience by reason of the implementation of this part of the Protocol or, in exceptional circumstances, to safeguard Community interests.

The following are approved measures on import duty rates in the EAC CET, for 10 of the products in question.

1. Electric and hybrid vehicles

Uganda and Rwanda are set to stay (suspend) application of EAC CET rate and apply a duty rate of zero per cent for one year. The same applies to electric motorcycles.

Normally, such vehicles attract a rate of 25 per cent under the EAC Common External tariff.

However, Kenya will suspend the application of the 25 per cent rate and instead, apply a duty rate of 35 per cent on electric and hybrid vehicles, according to the publication.

2. Mobile phones

In the current fiscal year, Uganda is suspending the application of the normal zero per cent rate to impose a duty rate of 10 per cent mobile phones; while Kenya is applying a duty rate of 25 per cent.

3. Inputs for the assembly/manufacture of mobile phones

Rwanda, Kenya, and Uganda granted a remission of duty to apply a duty rate of zero per cent for one year for the manufacture of mobile phones.

4. Worn items of clothing, footwear

For these products, Uganda, Burundi, and Tanzania are set to stay the application of the current 35 per cent or $0.4/Kg whichever is higher, and apply a duty rate of 35 per cent.

Kenya is expected to apply a duty rate of 35 per cent or $0.20/Kg whichever is higher for one year.

Regarding Rwanda, the country plans to apply a duty rate of $2.5/Kg of Worn items of clothing.

Concerning footwear, Rwanda plans to stay application of EAC CET rate of 35 per cent or $0.4/Kg whichever is higher, and apply a duty rate of $5/Kg.

5. Buses for transportation of more than 25 persons

It is expected that Burundi and Rwanda will stay application of the EAC CET rate of 25 per cent and apply a duty rate of 10 per cent for buses for transportation of more than 25 persons and not exceeding 50 persons.

Also, the two countries are set to stay application of the EAC CET rate of 25 per cent and apply a duty rate of 0 per cent for buses for transportation of more than 50 persons.

Tanzania plans to stay application of the EAC CET rate of 25 per cent and apply a duty rate of 0 per cent for buses for transportation of more than 25 persons imported for the rapid transport project in the country.

Kenya is applying a higher duty rate of 35 per cent on such buses for the one year under consideration.

6. Vehicles with a capacity to transport 5 tonnes of goods and above

Uganda, Rwanda, and Burundi will stay application of the common EAC rate of 25 per cent, and impose a duty rate of 10 per cent to motor vehicles for transport of goods with gross vehicle weight exceeding 5 tonnes but not exceeding 20 tonnes.

Concerning motor vehicles for the transport of goods with gross vehicle weight exceeding 20 tonnes, Uganda, Rwanda and Burundi are exempting them from duty.

For Kenya, it is suspending the application of the EAC CET rate of 25 per cent and instead imposing a duty rate of 35 per cent to such vehicles.

7. Ccooking oil

EAC Partner States also intend to tax cooking oil differently in the current financial year. Tanzania is staying application the EAC CET rate (of 35 per cent) to impose a lower duty rate of 25 per cent or $500 per tonne whichever is higher.

Rwanda is applying a duty rate of 25 per cent to this product.

In the case of Uganda, the country is imposing a duty rate of 60 per cent - almost double the common tariff - for refined sunflower seed or sunflower oil.

8. Sugar

Rwanda is staying application of EAC CET of 100 per cent or $460 per tonne, to apply a duty rate of 25 per cent. Uganda is also charging a rate of 25 per cent on sugar (f or industrial use).

Burundi is exempting sugar (for industrial use) from tax, while Tanzania is applying a 35 per cent rate on sugar imported under a permit issued by the Tanzania Sugar Board.

9. Rice

Rice, one of the staple foods in the region, is attracting different tax rates this financial year.

Rwanda decided to stay application of EAC CET of 75 per cent or $345 a tonne whichever is higher, and charging a lower duty rate of 45 per cent or $345 per tonne whichever is higher.

Kenya is applying a duty rate of 35 per cent or $200 a tonne whichever is higher.

10. Iron and steel reinforcement bars and hollow profiles

For these construction materials - iron and steel reinforcement bars and hollow profiles - Kenya is staying application of the EAC CET rate, and instead imposing a duty rate of 35 per cent or $300 a tonne whichever is higher.

Tanzania is charging a duty rate of 25 per cent or $250 a tonne whichever is higher; while Rwanda is applying a duty rate of 35 per cent.

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