Kenya's new ceramics tax irks partners
Kenya has imposed excise duty on ceramic tiles originating from Uganda and Tanzania, setting off fears of a potential trade dispute with Kampala and Dodoma terming the tax as 'discriminatory.'Uganda brough this up before the EAC Sectoral Council on Trade, Industry, Finance and Investment (SCTIFI) during a meeting in Arusha last month (May 26-30), saying it has affected Uganda originating ceramic tiles, in contravention of the principle of National Treatment as enshrined in Article 15 of the EAC Customs Union Protocol and contrary to the broader objectives of the EAC Customs Union.
Kenya imposed five percent duty or Ksh200 ($1.55) per square metre on imported ceramic paving or tiles as part of a list of goods and services subject to new duties under the Tax Laws (Amendment) 2024 that came into effect in January.
The EAC Secretariat said that a related issue had been raised by Tanzania in December 2024.
AdjustmentsIt was noted that the matter was reported during the Regional Monitoring Committee and also during the Sectoral Committee on Trade held in May where Kenya promised policy adjustments to the national budget for the financial year 2025/2026.
Kenya added that consultations were on, and an update would be provided during the 47th SCTIFI meeting but argued partner states have excise duty which does not conform to the provision of Article 15 of the Protocol establishing the EAC Customs Union.
The meeting noted that many partner states have imposed excise duty on goods produced within the community which does not conform with the provisions of the EAC Customs Union.
EAC Sectoral Council on Trade, Industry, Finance and Investment (SCTIFI) directed the EAC Secretariat to compile a list of all goods for which excise duty has been imposed contrary to Article 15 of the Protocol establishing the EAC Customs Union and convene an Extraordinary meeting of the EAC Sectoral Council on Finance and Economic Affairs to deliberate on the matter by end of July.
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