Nairobi — Manufacturers of vegetable oil have written to the National Treasury in a bid to have the new rate of duty on crude palm oil of 10 percent removed.
The Edible Oil Manufacturers of Kenya hold that the rate has significantly increased costs of importing the critical commodity and that consumers will bear the brunt through price hikes on cooking oil and other end products made from processing of crude palm oil.
The new rate took effect from the start of this month as the East African Community agreed to a proposal by Kenya to hike the rate from the previous zero rate under the common external tariff (CET).
Price of a 20-litre jerry can of the commodity has since jumped to Sh4,200 from Sh3,800 following the new tax, as manufacturers grapple with increased costs which set the stage for higher consumer prices.
"We have written to the National Treasury to have this tax removed because this is making the costs of living go up by increasing prices of a critical commodity like cooking oil," Billow Kerrow, chair of the lobby and also chairman of the Darfords Industries Limited.
Imposition of the duty will also undo the steady price drops on vegetable oil and related products that Kenyans have been enjoying on a combination of the strengthening shilling and major source markets like Indonesia lifting caps on import quotas of crude palm oil.
Darfords Industries is one of the local firms that manufacture cooking oil and other end products from the refining of crude palm oil like soap, margarine and cosmetics.
The 10 percent import duty is one of the new taxes that were imposed on various imports under the East African Community common external tariff (CET).
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Edible oil manufacturers also questioned Kenya's decision to apply for the new tax given that the country fully imports crude palm oil.
Kenya and Uganda are the two countries in East Africa that are subjecting imports of crude palm oil to the 10 percent import duty.
Besides the new tax, locally, there are four other taxes imposed on imported crude palm oil- Value Added Tax (VAT) at 16 percent, Import Declaration Fee (IDF) at 2.5 percent and Railway Development Levy (RDL) at 2 percent.
There is also the Oil crops and nuts development (Ocnd) levy charged at the rate of 2 percent.
"In view of the ongoing uproar and demonstrations against tax hikes across the country, we call upon the government to urgently seek a stay of execution of this new tax," says Mr Kerrow.
The former Senator adds; "this single act will cushion millions of Kenyan consumers, especially the vulnerable ones against imminent significant price hikes for these essential household products."
Cooking oil is an important component in the cooking of food like Mandazi, Chapatis, Chips among others and production of essential household products like bread, margarine, soap and some cosmetics with glycerin.
Therefore, the imposition of the new tax will skyrocket the prices of essential household products, further pushing up the cost of living for millions of struggling Kenyans.
