KENYAN IMPORTERS FACE HIGHER LEVIES UNDER EAC CUSTOMS RULES

A tractor-pulled machine sprinkles lime at a farm
Uasin Gishu County, Kenya. Duty on farm implements
and industrial inputs up from 10pc to 25pc from
Wednesday.

The recent haggling among the East African finance ministers has left Kenyan consumers facing another wave of price increases as Customs taxes rise on a number of commonly imported items.

The consumers, already reeling from a recent adjustment of excise duty, face higher costs to cover Customs duty on a number of farm implements, industrial inputs and construction material.

Farmers will from today pay 25 per cent duty to import aluminium milk cans instead of the 10 per cent levied on their peers in the region, an East African Gazette notice shows.

The notice dated June 19 indicates farmers will also pay 25 per cent tariff on made-up fishing nets instead of 10 per cent being applied at the moment. Manufacturers will also have to ship in paper and paperboard products at 25 per cent customs duty instead of 10 per cent throughout the next fiscal year.

The region’s top producer — the Webuye-based Panpaper — collapsed a few years ago, forcing East African paper converters to turn to imports.

“The Council of Ministers has approved the measures on customs duty rates under the harmonised Community Description and Coding System,” said Harrison Mwakyembe, chairperson of EAC Council of Ministers.

Dr Mwakyembe said the measures will be in force throughout the fiscal year that ends July 2016.

For motorists who already face Sh3 per litre levy, the new customs adjustments raise the duty on oil filters and intake air filers to 25 per cent instead of 10 per cent.

Also raised from 10 per cent to 25 per cent is import duty on smart cards, liquefied gas cylinders as well as alloyed steel bars and rods and aluminium alloy sheets used in the construction sector.

The equipment for scaffolding, shuttering, propping or pit propping, which currently attracts no duty, will be imported at the rate of 25 per cent from tomorrow.

The country's Treasury secretary Henry Rotich alluded to the measures in his 2015/16 budget as policies to protect domestic production. In the give-and-take adjustments, however, Mr Rotich negotiated to keep the price of rice and wheat down.

Kenya will apply a duty rate of 35 per cent or Sh19,600 ($200) per tonne (whichever is higher) on rice, instead of 75 per cent or $345 per tonne. Kenya imports nearly two thirds of the rice that it consumes annually.

Similarly, millers will be allowed to import wheat grain at a lower tax of 10 per cent, down from the region’s common external tariff of 35 per cent.

In Kenya, wheat is classified as the second most important food crop after maize but even with good rains, millers still have to import up to one third of the nearly one million tonne domestic demand.

The East African