State slashes tax on imported rice, wheat to increase supply
The East African Community (EAC) has allowed Kenya to reduce import duty levied on rice and wheat to rates below the bloc’s common external tariff to help address the high food prices in the country.
The East African Community (EAC) has allowed Kenya to reduce import duty levied on rice and wheat to rates below the bloc’s common external tariff to help address the high food prices in the country.
Rice imported from countries outside the region will now be subject to a custom duty of only 35 per cent, instead of the 75 per cent charged under the EAC common tariff, while wheat from outside the region will be taxed at 10 per cent, instead of EAC’s rate of 35 per cent.
National Treasury Cabinet Secretary Njuguna Ndung’u said the move will help meet the domestic demand of rice and wheat in efforts to bring down the high food prices Kenyans are currently grappling with.
“Despite rice and wheat being among the staple food items in our homes, Kenya’s production of these food items does not meet domestic demand,” Prof Ndung’u told Parliament as he read the 2023/24 budget.
To further contain food inflation, the government will waive import duty on inputs for the manufacture of animal feeds, a move that is expected “to promote the local manufacturing and make animal feeds affordable to farmers,” Prof Ndung’u said.
The EAC has also allowed Kenya to continue the duty-free importation of raw materials used for making diapers, which started in July 2022, for another year in a bid to reduce prices.
At the same time, to protect local manufacturers of diapers, Kenya will continue to tax imported diapers with a custom duty of 35 per cent, instead of the 25 per cent allowed under the EAC common tariff.
Other custom levies maintained for the next year include a 35 per cent duty on imported leather and footwear, paper products, plastic and rubber products and a levy of between $120 (Sh16,788) to $200 (Sh27,980) per metric tonne of timber products.
