Brace for higher cost of imported goods as new EAC tariffs kick in

Imported vehicles at the Mombasa port.  [File, Standard]

Despite the shelving of the Finance Bill, 2024, Kenya will still be confronted with a rise in the cost of various goods after import duties under the East African Community (EAC) Common External Tariff (CET) came into force.

While a proposal to impose an excise duty of 25 per cent on crude palm oil and finished cooking oil failed with the fall of the Finance Bill, the government has been allowed to charge an import duty of 10 per cent on crude palm oil as opposed to the ECA CET rate of zero per cent.

The government will also apply a duty rate of 25 per cent or $500 (Sh64,500) per metric tonne, whichever is higher, for one year on refined soya bean oil, RDB palm olein, other palm oils, refined sunflower oil and refined corn oil compared to the EAC CET rate of 25 per cent.

Importers of RDB palm stearin, a co-product of palm olein traded at a discount to palm oil and palm olein, making it a cost-effective ingredient in several applications, will also pay a higher duty rate of 25 per cent or $500 per metric tonne compared to the EAC CET rate of 10 per cent.

Imported margarine and edible mixtures will also cost more after the EAC approved Kenya’s application to apply a duty rate of 35 per cent or $ 500 per metric tonne, whichever is higher, compared to the EAC CET rate of 35 per cent.

The cost of worn clothes will also stay higher after the EAC CET rate was stayed, which means importers will pay a duty rate of 35 per cent or a specific duty of $20 (Sh2,580) per kilo, whichever is higher, for the next year.

Preserved or prepared vegetables will also cost more after the EAC allowed Kenya to stay application of the EAC CET rate and apply a duty rate of 35 per cent or $400 (Sh51,600) per metric tonne, whichever is higher, for a year.

Other edible products that will attract higher rates are sweet corn, tomatoes (whole or pieces, tomato paste and other preserved tomatoes and peas).

They will attract a duty of 35 per cent or $400 per metric tonne, 35 per cent or $250 per metric tonne, 35 per cent or $400 per metric tonne and 35 per cent or $250 (Sh32,250) per metric tonne, whichever is higher, respectively for the next year. Kenya also secured a stay of application of the EAC CET rate of 25 per cent on imported television sets, allowing it to apply a duty rate of 35 per cent.

However, consumers of rice will get a reprieve after the country secured a stay of application of the EAC CET rate of 75 per cent or $345 (Sh44,505) per metric tonne, which would see the country apply a lower duty of 35 per cent or $200 (Sh25,800) per metric tonne on all imports for the next one year.

Importers of detergent powder and other organic surface-active agents, put up for retail sale, will pay a higher duty rate of 35 per cent or $500 (Sh64,500) per metric tonne as opposed to the EAC CET of 25 per cent.

While Uganda, Rwanda and Burundi applied to be allowed to zero-rate importation of tractors for semitrailers instead of imposing the EAC CET duty of 10 per cent, Kenya successfully applied for an import duty of 35 per cent. Others affected are importers of trailers and semi-trailers.

All motor vehicles currently attracting a CET rate of 25 per cent will now attract a higher duty rate of 35 per cent.

Also affected are importers of wire of iron or non-alloy steel and those plated or coated with zinc, who will pay a duty rate of 35 per cent or $300 (Sh38,700) per metric tonne, whichever is higher, as opposed to the EAC CET rate of 10 per cent.

The price of cooking gas is also set to go up after Kenya joined Uganda in applying and securing a stay of application of the EAC CET rate of 0 per cent, allowing them to apply a duty rate of 35 per cent for Liquified Petroleum Gas (LPG) cylinders for one year.