Kenyan sweets turns bitter after Uganda and Tanzania defy EAC pact and slaps Kenyan confectionery products with stiff tax

KRA has stated that confectionery products made of industrial sugar imported under the EAC duty remission scheme should not be subjected to customs taxes.

  • Tanzania and Uganda have imposed a levy 25 per cent import duty on Kenyan confectioneries.
  • Tanzania and Uganda cite use of imported industrial sugar in the goods.
  • This is despite availability of certificates of origin issued by the Kenya Revenue Authority (KRA).

Tanzania and Uganda have imposed taxes on Kenya made confectionery products like chocolate, ice cream, biscuits and sweets citing use of imported industrial sugar in the goods.

“We are not supposed to pay duty when we sell in the region because our competitors in the region also rely on industrial sugar imported under the same remission scheme.” Kenya Association of Manufacturers (KAM) chief executive Phyllis Wakiaga.

This is despite availability of certificates of origin issued by the Kenya Revenue Authority (KRA) which indicates the goods were made in Kenya and instead opted to levy 25 per cent import duty on Kenyan confectioneries.

Acceptance of the certificate-- a document showing where a good has originated so as to determine the import duty chargeable — guarantees Kenyan goods tax-free entry into East Africa Community common market made up of Tanzania, Kenya, Uganda, Rwanda and Burundi allows free movement of locally manufactured goods within the bloc.

Tanzania and Uganda revenue authorities accused the Kenyan manufacturers of tilting competition in their favour by using industrial sugar imported under a 10 per cent duty remission scheme.

However, KRA has stated that confectionery products made of industrial sugar imported under the EAC duty remission scheme should not be subjected to customs taxes.

“We seek to clarify that upon records held by KRA, the products are not affected by legal notice No.4536 which applies to white sugar for home use.” KRA’s officer in charge of exports Julius Kihara said in an April 9th letter separately addressed Tanzania and Ugandan revenue bodies.

The region does not produce industrial sugar.

“This is an EAC-wide remission scheme that is available to all manufacturers in the region,” said Ms. Wakiaga.

This is not however the first time certificates of origin from Kenya are being rejected in the region.

Last year, manufacturers of products like cement, edible oils, textiles and lubricants faced similar roadblocks in the region.

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