NAIROBI, Kenya, June 8 – The Kenya Association of Manufacturers (KAM) is opposed to the introduction of a 10 percent levy on imported raw materials and intermediate goods, arguing it will make Kenyan products uncompetitive in the East African market.
The Export Development and Promotion Levy is proposed under the 2023 Finance Bill that was published by the National Assembly on April 28, 2023.
It seeks to amend laws relating to various taxes and duties while proposing new taxes, regulations, and incentives.
KAM presented its views to the National Assembly’s Departmental Committee on Finance and National Planning on May 24th, 2023, where it submitted members’ feedback, concerns, and proposals.
“The Association is however concerned and opposed to the imposition of levies on imported raw materials and intermediate goods. Imposing levies on imported raw materials and intermediate products shall make Kenya uncompetitive compared to other EAC Partner States,” KAM Chairman Rajan Shah said.
“This import levy on raw materials goes against the established taxation regimes such as EAC Common External Tariff (CET) and export-led Duty Remission Scheme (DRS).”
If the bill passes, some of the products that will be slapped with additional levies include raw materials and intermediate products such as clinker, metal products (wire rods and billets), and packaging paper products.
Additional levies, KAM argues, will render Kenyan products uncompetitive from those of the EAC partner states and within the African Continental Free Trade Area (AfCFTA).
“It is our position and proposal therefore that the 10% Export Development and Promotion Levy on imports should spare raw materials and intermediate products, and instead, charge it on finished products only, except for goods originating from EAC Partner States due to Custom Unions Protocols, and countries with Free Trade Area (FTA) agreements with Kenya like the Common Market for Eastern and Southern Africa (COMESA) and Africa Continental Free Trade Agreement (AfCFTA),” Shah added.
“We remain committed to working closely with Government on increasing the manufacturing sector’s contribution to the Gross Domestic Product.”
