KENYA – The Kenyan Agricultural Food Authority (AFA) has imposed a 2% levy on the customs value of imported cereals, along with a 0.3% levy on their exportation, a move expected to increase cereal prices across the nation.
According to a report by Nation, these new charges are expected to drive up costs for importers. For instance, a truck of maize will now attract an additional KES 20,000 (US$137.93), while a truck of rice will incur an extra KES 50,000 (US$344.83).
These additional costs come on top of existing charges from various state agencies, including the Kenya Revenue Authority, the Kenya Plant Health Inspectorate Service, and the Kenya Bureau of Standards (KEBS).
Local media reports that the levy has sparked criticism from industry stakeholders.
Agayo Ogambi, CEO of the Shippers Council of East Africa, argued that the charges would stifle business growth and place an unfair burden on farmers and exporters.
“The levies and additional taxes on exports will make our products uncompetitive in East Africa and Comesa. Uganda and Tanzania are already opposing the imposition of these levies,” said Ogambi.
Roy Mwanthi, Chairman of the Kenya International Freight & Warehousing Association (KIFWA), emphasized the immediate impact, noting that rice imports had already halted due to the levy. He warned that this would lead to higher rice prices, affecting households nationwide.
In response to growing protests, AFA Director-General Bruno Linyiru announced a temporary freeze on the levies to allow the regulator to address stakeholders’ concerns. However, Mwanthi cautioned that if the levies are reinstated, consumers are likely to face increased costs.
This development comes after recently, the Kenyan Parliament announced the introduction of the Price Control (Essential Goods) (Amendment) Bill, 2024, which aims to give the state authority to set both retail and wholesale prices for key commodities.
It seeks to amend the Price Control (Essential Goods) Act, 2011, and specifically targets goods such as maize, maize flour, wheat, wheat flour, rice, cooking fat or oil, sugar, and certain pharmaceutical drugs.
The proposed legislation, spearheaded by nominated Senator Tabitha Mutinda, was introduced in the Senate for its First Reading in August.
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