Meat, alcohol and sugar prices rise with new EAC tax

By Nation Africa

Prices of popular commodities such as dairy products, meat, alcohol, cereals, cotton and textiles imported into the East African region are expected to increase significantly after the entry into force yesterday of a new tax.

In an agreement reached on May 5, 2022 by the partner states of the East African Community (EAC), the common external tariff for imports entering the bloc was increased to 35% from July 1, 2022 .

The levy is imposed on finished products imported from non-member states as part of a strategy to stimulate local production and industrialization.

The levy affects a tax band of products which also includes; iron and steel, edible oils, furniture, leather products and fresh cut flowers.

Others on the increased Common External Tariff (TEC) tax band include fruit, nuts, sugar and confectionery, coffee, tea, spices, headgear, ceramic products and paints, among others.

This means that import shipments of products entering Burundi, Kenya, Rwanda, South Sudan, Uganda, Tanzania and DR Congo will now cost more yesterday.

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The Kenya Revenue Authority (KRA) has informed importers of the changes and urged them to incorporate them into their tax transactions.

“Kenya Revenue Authority wishes to draw the attention of taxpayers and the general public to the recent changes to the Harmonized Commodity Description and Coding (HS) System and the East African Community Common External Tariff ( EAC TEC)” Customs and Border Control Commissioner, Lilian Nyawanda said in a circular.

The new levy is higher than the 30 or 33 percent tariff that was previously proposed by the EAC Partner States.

The May agreement resolved the implementation of the EAC CET, which began in 2005 after the entry into force of the EAC Customs Union Protocol.

The EAC Council of Ministers – a key decision-making body in the bloc – has, however, agreed to flexibility in the implementation of the revised CET, particularly on products currently affected by current global economic realities.

Article 12 of the EAC Customs Union Protocol establishes a three-band CET with a minimum rate of zero percent on raw materials and capital goods, 10 percent on intermediate goods and 25 percent cent on finished products.

In addition, certain products considered to be of economic importance to partner states are subject to tariff rates above 25%, including sugar, wheat, milk, textile products, corn, rice and cigarettes. .

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Rachel J. Bradford