KAM Central Kenya Chapter Chairman Anup Bid (L) with KAM chairlady Flora Mutahi (R) in a past media briefing. [Photo: Courtesy]

Kenya Manufactureres Association has expressed its concern about the 20 percent excise duty on sweets and chocolates saying that the move will lead to massive layouts in the industry.

KAM said in a statement that prices of these products were set to rise and allow illegal trade in imports by unscrupulous dealers. The move will adversely affect job creation and revenue generation.

“The nine main confectionery manufacturers in Kenya directly employ 3,479 people and 16,000 indirectly who have families to take care of, this new tax threatens their livelihoods as the companies might be forced to reduce staff as part of cost cutting measures to remain afloat,” it supposed.

Local sweet manufacturers which is projected to create more than 700 jobs is on the line. The confections expansion estimated to be Sh10 billion was expected to hit a high of Sh56.6 billon and create 4,530 job opportunities by 2022.

The manufacturer association’s statement read, “The government should have imposed excise tax on imported confectioneries at the specific rate of Sh20 per kilogram for sweets and Sh200 per kilogram for chocolate but the new tax makes Kenyan-made sweets and chocolates more expensive than imported ones.’’

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The Finance Bill 2018 had proposed taxation of sugar confectioneries and chocolates of Sh20 per kilogram with an argument that the products were exposing consumers to harmful effects of sugar related diseases.

In early 2018, Tanzania and Uganda imposed a 25 percent tax on Kenyan made confectioneries with Trade Principal Secretary Chris Kiptoo requesting Tanzanian colleague Prof Elisane Ole Gabriel to fix the tax issue on sweets, chocolates, ice cream and biscuits.

Expert in Public affairs and Policy Kiriro Wa Ngugi says that the excise duty on these confections contradicts the government’s support of the Big Four agenda. Kiriro believes that the government should encourage and not discourage investors since it had signed Africa Free Trade Agreement.