The Kenya Association of Manufacturers (KAM) has issued a stark warning about the proposed 25 percent excise duty on vegetable oils in the Finance Bill 2024, highlighting potential widespread economic and social repercussions.

KAM's Edible Oil Sub Sector has urgently called on policymakers to reconsider the tax, which would apply to both raw materials and refined cooking oils.

The group argues that such a measure could significantly inflate the cost of cooking oil, a staple in Kenyan households, by as much as 80 percent.

This increase could render cooking oil unaffordable for millions of Kenyans, particularly affecting low-income earners and small-scale traders.

Cooking oil's role in everyday food items means the proposed excise duty would trigger a cascading effect on prices.

KAM projects the cost of a standard loaf of bread (400g) would rise from Kshs 70 to Ksh80.

Other essential products would also see significant price hikes, with long bar soap potentially increasing from Ksh180 to Kshs 270, and margarine (250g) from Ksh 160 to Ksh300.

KAM warned that such price increases would disproportionately impact the most vulnerable, exacerbating the already high cost of living and pushing millions deeper into financial distress.

The proposed tax could undermine the government's efforts to promote local value addition in agribusiness and hinder the growth of domestic edible oil production.

The edible oils sector is a key part of Kenya's economy, directly employing approximately 10,000 individuals and indirectly supporting over 30,000 jobs.

The new tax could jeopardide these livelihoods and destabilise the broader manufacturing industry.

KAM is urging the government to scrap the proposed 25 percent excise duty on vegetable oils, describing it as an economic miscalculation with potentially severe humanitarian consequences.

"We cannot afford to implement a tax that could lead to a humanitarian crisis," KAM stated.