Meat, alcohol, sugar prices increase on new East African Community (EAC) tax

The prices of popular products such as dairy, meat, alcohol, cereals, cotton, and textiles imported into the East Africa region are set to rise substantially after a newly raised tax charge took effect yesterday.

In a deal struck on May 5, 2022, by the partner states of the East African Community (EAC), the Common External Tariff for imports entering the bloc has been raised to 35 percent effective July 1, 2022.

The levy is imposed on imported finished products from non-member states as part of a strategy to stimulate local production and industrialisation.

The levy affects a tax band of products that also includes; iron and steel, edible oils, furniture, leather products, and fresh-cut flowers.

Others on the raised Common External Tariff (CET) tax band include fruits, nuts, sugar, and confectionery, coffee, tea, spices, head gears, ceramic products, and paints, among others.

This means that import shipments of the commodities entering Burundi, Kenya, Rwanda, South Sudan, Uganda, Tanzania, and DR Congo will now cost more effective yesterday.

“Kenya Revenue Authority would like to draw the attention of taxpayers and the general public to recent changes in the Harmonised Commodity Description and Coding System (HS) and the East African Community Common External Tariff (EAC CET)” Commissioner for Customs and Border Control, Lilian Nyawanda said in a circular.

The new levy is higher than the 30 or 33 percent tariff that was earlier proposed by the EAC partner States.

The May deal resolved the implementation of the EAC CET, which commenced in 2005 after the EAC Customs Union Protocol came into force.

The EAC Council of ministers—a key decision-making organ of the bloc- however, agreed on flexibility in the implementation of the revised CET, particularly on products currently affected by the current global economic realities.

Article 12 of the EAC Customs Union Protocol establishes a three-band CET with a minimum rate of zero percent on raw materials and capital goods, 10 percent on intermediate goods, and 25 percent on finished goods.

Further, there are certain products considered to be of certain economic importance to the Partner States that attract duty rates of above 25 percent including sugar, wheat, milk, textile products, maize, rice, and cigarettes.

[email protected]^[1]

References

1. ^{^} [email protected] (www.bing.com)