East Africa: Kenya to Scrap Excise Duty On Eggs, Onions From EAC

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Thousands of demonstrators hit the streets to protest against the proposed Finance Bill being debated in Parliament this week.
17 June 2024
The Herald (Harare)

Kenya has proposed to remove excise duty on eggs, potatoes and onions from the East African Community (EAC) in measures that could promote intra-trade within the bloc.

At a pre-budget meeting in May, EAC finance ministers agreed on some custom measures to protect industries in the region, Njuguna Ndung'u Kenya's Treasury Cabinet Secretary said Thursday.

Delivering the 2024/25 Budget speech before Parliament, he proposed to remove the 25 percent excise duty introduced on the products last year, which affected trade relations between Kenya and her neighbours.

"To promote trade across the East African region, I propose the removal of this excise duty on imported eggs, potatoes, and onions originating from East African Community partner states, subject to goods meeting the EAC rules of origin," he said.

Removal of the taxes could be the result of engagements between Kenyan President William Ruto and his Ugandan counterpart Yoweri Museveni, since Uganda has been a big exporter of eggs to Kenya.

Kenyan consumers have witnessed a high increase in prices of the products, with the latest Kenya National Bureau of Statistics (KNBS) data showing that by May, prices of a kilo of onions had increased by 67,7 percent, and potatoes by 10 percent.

The EAC ministers also agreed on several custom measures to boost the competitiveness of locally manufactured products by allowing stays of application of the Common External Tariff as well as adopting higher rates where necessary to encourage local production in the region.

"The ministers also agreed on duty remission for raw materials and inputs used by local manufacturers to facilitate EAC domestic production," said Prof Ndung'u.

"In order to meet local demand and enhance food security on key staple foods, Kenya was granted an extension of the current stay of application to import rice at a duty rate of 35 percent or US$200 per metric tonne whichever is higher for one year instead of EAC CET rate of 75 percent or US$345 per metric tonne, whichever is higher," said Prof Ndung'u.

"And also to import wheat at a duty rate of 10 percent instead of 35 percent for one year under the EAC Duty Remission Scheme CET rate of 75 percent or US$345 per metric tonne, whichever is higher."

Kenya also extended the duty remission at the rate of 10 percent on the parts used in the assembly of motorcycles extended for one year across the region.

Iron and steel products would be taxed at 35 percent instead of the EAC's common rate of 25 percent.

Animal feed will continue being duty-free while imported leather bags will attract a rate of 35 percent instead of the EAC's 25 percent. -The East African

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