MPs move to bar Chinese fish with 20pc excise tax

Chinese fish imports

A trader prepares to transport fish imported from China in Kisumu County on October 17, 2018.  Kenya will soon ban fish imports from China.

Photo credit: Tonny Omondi | Nation Media Group

Fish importers will pay a 20 percent excise duty if MPs approve changes to the law aimed at protecting the local fish industry from cheap imports from China and Europe.

Alego Usonga MP Samuel Atandi wants the First Schedule of the Excise Duty Act, 2015 amended to introduce excise duty on imported fish.

Mr Atandi has written to National Assembly Speaker Moses Wetangula seeking clearance to introduce an amendment to the Excise Duty Act to include imported fish as excisable goods.

“Pursuant to Standing Order 114(1), I would like to introduce a Bill to amend the First Schedule of the Excise Duty Act, 2015 to introduce excise duty on imported fish at the rate of 20 percent of the customs value,” Mr Atandi wrote in a letter dated March 31, 2023.

Under the current law, excise duty is charged on excisable goods manufactured in Kenya by licensed manufacturers, excisable services supplied in Kenya by a licensed person and excisable goods imported into Kenya.

“Fish imports from China and other European countries are estimated to be Sh5 billion annually. Yet Kenya is not getting any revenue from the transactions,” Mr Atandi said.

“There are also other seafood imports that we are targeting with this law.”

Fish imports from China are cheaper than locally produced fish.

Local traders have for long been crying foul, saying importers are selling tilapia from the Asian country directly to retailers at throwaway prices, ending up depriving them of sales.

Tilapia from China trades at Sh150 to Sh300 a kilo, while the Kenyan variety goes for Sh400. Nile Perch (mbuta) fetches Sh320 a kilo.

Loss of employment

Mr Atandi said the importation of cheap fish is adversely affecting the local industry and may lead to loss of employment as the industry is estimated to be employing approximately 1.2 million people directly and indirectly through fishing, fish farming and sale.

“Kenya has the potential to produce fish through marine and freshwater aquaculture. If protected, the fish industry may expand to meet local demand and compete internationally, making the country a fish exporter,” Mr Atandi said.

He said the proposed changes to the law will help to protect the local fish industry from cheap imported fish.

He said the enactment of the law will generate revenue at relatively low administrative and compliance costs and improve the vertical equity of the tax system.

“The purpose of this letter is, therefore, to request assistance in the preparation of the proposed Bill,” Mr Atandi wrote.

House rules require any MP seeking to introduce a Bill to seek clearance from the Speaker before proceeding to draft.

The proposed Bill comes at a time the value of China fish imports has been rising steadily over the past five years as the Chinese take advantage of their cheaper supplies to gain a foothold in the Kenyan market.

The subject of Chinese fish flooding local markets sparked diplomatic unease between Nairobi and Beijing in 2018 when former President Uhuru Kenyatta said Kenyan government officials should find ways of curtailing the imports.

Data from the Fisheries showed that Kenya shipped 14.8 million kilogrammes of the delicacy from China in 2021, valued at Sh2 billion, up from Sh1.5 billion in the previous period.

This has increased China’s market share from 70 percent in 2020 to 83 percent, as the Asian nation squeezed out South Korea, Thailand, Tanzania and Uganda from top source markets in the fight for the Kenyan consumer.

In total, Kenya imported fish worth Sh2.47 billion in 2021 from the 19 sampled countries, a 10 percent jump from Sh2.2 billion in 2020, to bridge the growing deficit due to dwindling stocks from major domestic sources such as Lake Victoria.