Nairobi — The Government has introduced the Excise Duty (Amendment) Bill, 2025 in the National Assembly, seeking to amend the Excise Duty Act, particularly concerning the importation of fully assembled electric transformers.

The Bill sponsored by Kikuyu MP Kimani Ichu'ngwa aims to remove the excise duty that was imposed on imported fully assembled electric transformers and their parts.

This move is designed to ease the cost burden on the importation of key transformer components, following concerns that the previous excise duty, introduced in the Tax Laws (Amendment) Bill, 2024, had an unintended negative impact on transformer manufacturing and supply.

The excise duty, set at 25 percent, was initially put in place with the goal of promoting local assemblers.

However, the legislation had the opposite effect, raising the cost of parts for the assembly of transformers and thereby increasing the price of manufacturing.

The new amendment seeks to address these challenges by eliminating the duty on imported transformers and parts, thereby making it easier and more affordable to produce transformers domestically.

"The principal object of this Bill is to amend the Excise Duty Act to remove excise duty on imported fully assembled electric transformers."

The document further explains that the excise duty "was imposed in the Tax Laws (Amendment) Bill, 2024 with the intention to support local assemblers," but instead has resulted in "increasing the cost of importing parts."

The Ministry of Energy and other key stakeholders hope this adjustment will lead to a reduction in the cost of electricity and enhanced power connectivity, especially through increased manufacturing and supply of transformers to Kenya Power and Lighting Company (KPLC).

This is seen as a crucial step toward improving the country's energy infrastructure, as transformers are a vital part of power distribution.