Companies allowed to withdraw from regional scheme

Kenya Association of Manufacturers (KAM) chief executive Betty Maina. File 

By Nation Correspondent
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The east African secretariat has circulated an administrative mechanism allowing firms to withdraw from the duty remission scheme.

This comes following the Regional Public-Private Sector Dialogue on East African Community Duty Remission Scheme held in October that resolved that EAC comes up with a mechanism that allows for withdrawal of firms from the scheme.

The regional private sector particularly had concerns over the Article 25 of the East Africa’s Common Market Protocol saying it crippled trade within the region by making their goods more expensive than those not manufactured in the region.

Article 25 of the Protocol which was operationalised in 2005, only allows goods benefiting from export promotion schemes to be primarily for export.

Basically, 100 per cent of the production for export is expected to be sold outside the EAC region but in case it is sold within the region, then only 20 per cent of annual production will be allowed provided that full duties, levies and other charges are paid.

Deter unfair competition

During the dialogue, the EAC Customs Director Mr Kenneth Bagamuhunda, said the protocol restricts selling of these goods within the EAC in a bid to deter unfair competition.

Speaking at the at the same event, the Kenya Association of Manufacturers chief executive Betty Maina said over 250 Kenyan companies exporting to Uganda and Tanzania stand to lose 54 per cent of their market share owing to this article.

“This scheme should only apply to goods granted approval by EAC Council while all other goods should be exported using EAC Rules of Origin (RoO),” said Ms Maina