Poultry farmers protest new Kenya tax on eggs

A man sells eggs in Kampala City. Poultry farmers are crying foul over a 25 percent levy slapped on eggs by Kenya. Photo  / File

What you need to know:

  • Kenya had imposed a 25 percent Excise Duty on imported eggs, in addition to delayed approval of import permits, which has affected famers.

Poultry farmers have protested a new tax imposed on Uganda eggs by Kenyan authorities.

In a February 10 letter addressed to Uganda Manufacturers Association (UMA), the farmers asked the government to engage Kenyan authorities on the matter.

Kenya had imposed a 25 percent Excise Duty on imported eggs, in addition to delayed approval of import permits, which has affected famers.

“Kenya is directly discouraging trade with Uganda by imposing this duty. Because of this, the price of eggs has also stagnated and most of our farmers are struggling to survive in the market,”  PAU wrote to UMA.

The levy comes on the back of a December 21, 2021 agreement in which Kenya had committed to lift the ban on poultry and associated imports from Uganda, which the country had instituted in January 2021 to protect its famers, who, officials claimed had been affected by Covid.

ECA protocal

Speaking in an interview yesterday, Mr Aga Sekalala Junior, the chairperson of the PAU, said the levy was now true non-tariff barrier that goes against the East Africa Community protocols.

“The EAC protocols say there shouldn’t be any tax. It is inappropriate and we are not happy about it. The market is supposed to be open,” he said, noting that Kenya has continued to apply levies judiciously depending on their mood of the season.

The levy has already been successfully challenged in court with traders under Eggs Traders Association of Kenya, obtaining an injunction, according to Mr Sekalala. Traders had lodged the petitioned in the Kisumu High Court.

In April, court issued an interim order restraining government from collecting or imposing taxes on table eggs imported from Uganda.

However, on June 9, Daily Monitor published a story in which Mr Godfrey Oundo Ogwabe, the chairperson Uganda National Cross Border Traders, noted that levies on eggs had continued despite a court ruling.

Mr Ogwabe said the levy was bad policy and in violation of the East African Community policy of free movement of goods and services originating from member states.

This week,  the East African  newspaper reported that Kenya’s Livestock Principal Secretary Harry Kimtai had said the levy could be a normal charge imposed on imports, noting that he had no specific information on the matter.

 Asked about the matter yesterday, the Commissioner of External Trade at the Trade ministry, Mr Emmanuel Mutahunga, said they had not received any official communication from their counterparts in Kenya.

“Normally non-tariff barriers are investigated following complaints from whether it is really happening,” he said, urging traders to share documents indicating that they are being charged this tax.

“If they (traders) are paying the tax, they should bring the documents. It will be taken from there. Otherwise this remains hearsay,” he said, adding that as far as government is concerned, nothing has changed from December 2021 agreement.

However, Mr Sekalala said they had relayed everything to government authorities, but nothing has been done.

“We notified the relevant ministries about our dilemma. They are aware,” he said. 

Long-standing dispute

The new trade tiff comes at a time the two countries are yet to resolve a long-standing dispute on milk after Kenya barred Uganda’s dairy products in 2019.

In the last two years, Kenya restricted Ugandan poultry and dairy product imports, straining the relationship between the two neighbours.

The poultry issue was resolved after Uganda threatened to ban Nairobi from exporting its goods to the landlocked neighbour.

In November, Uganda’s Cabinet had directed its Agriculture ministry to identify and list Kenyan products that would be banned by Kampala “in a short time” in retaliation against Kenya’s continued restriction on its

Agricultural products

Key agricultural exports to Uganda from Kenya include palm oil at Sh7.2 billion in 2020, sorghum (Sh1.4 billion), vegetables (Sh311 million) and legumes (Sh200 million).

Uganda eggs export quantities

According to PAU, monthly, their members export more than 500,000 trays to mainly Kenya, South DR Congo and South Sudan.

On these exports, the country earns above Shs5 billion per month. This is translated into an annual Shs60 billion export value. The country has more than 30 big and medium farms with a 3 million layers population countrywide.