Kenya has said it will retaliate on Excise Duty Uganda slapped on pharmaceutical, beer and spirits imports.
Kenya’s Trade Principal Secretary Chris Kiptoo, early this week said they had a discussion with the Ugandan government in December during a trade mission in Kampala and it had been agreed that the 13 per cent Excise Duty on Kenya’s pharmaceutical, beer and spirits is abolish.
“Uganda has given an undertaking that it will abolish these taxes, but if they do not, then we have no alternative but to reciprocate,” Dr Kiptoo told Business Daily, adding that there was need to harmonise taxes to create a level playing field for both countries.
He also pointed out that the move, which is discriminative and goes against the spirit of the East African Community Protocol, is hurting the country’s manufacturing sector.
EAC member states have been caught up in various tax issues with partner states, levying duty and preventing some goods from accessing certain markets.
For instance, Tanzania imposed veterinary levy on Kenyan milk while Uganda is also taxing poultry products (18 per cent VAT).
Previously, Tanzania has also blocked Uganda sugar from accessing its market.
Kenya has also said it is considering levying duty on poultry products coming in from Uganda. Uganda exports a lot of eggs to Kenya with a significant share coming in outside of the designated customs points.
Kenya’s Ministry of Trade has already proposed a 16 per cent duty on milk products that enters the country from Uganda as it seeks to protect dairy farmers who have raised concerns over the influx of cheap Ugandan milk.
Data presented to the Kenyan Parliament recently shows that milk imported from EAC, with the most volumes coming from Uganda, hit 110.7 million litres between January and September from three million litres in 2016.
Against EAC spirit
According to Kenya’s Trade Principal Secretary Chris Kiptoo, the 13 per cent levy on pharmaceutical, beer and spirits products is discriminative and goes against the spirit of the East African Community Protocol.