Summary
- Kenya which made a total tax collection of Sh1.5 trillion in the year to June last year will suffer the loss as a result of scrapping of tariffs.
- The country charges import duty of 25 percent on finished goods and 10 percent on intermediate goods as long as they originate from outside the Comesa and East African Community.
- Products classified as “sensitive” because of available local capacity however attract duty at higher rates between 35 and 100 percent.
Kenya is set to lose customs taxes totalling Sh10 billion or 0.6
percent of last year's government revenues once the Africa Continental
Free Trade Area (AfCTA) takes effect this year in July, a newly released
UN report shows.
The report produced jointly by the
United Nations Economic Commission for Africa (UNECA) and Trademark East
Africa (TMEA) however shows that East Africa as a whole will earn Sh180
billion in welfare gains and benefits as the successful implementation
of free trade deal will create 2 million jobs.
Kenya
which made a total tax collection of Sh1.5 trillion in the year to June
last year will suffer the loss as a result of scrapping of tariffs
currently charged on imports in effort to ease movement of goods on the
continent.
The country charges import duty of 25
percent on finished goods and 10 percent on intermediate goods as long
as they originate from outside the Comesa and East African Community.
Products classified as “sensitive” because of available local capacity
however attract duty at higher rates between 35 and 100 percent.
“There
would be a small price to pay once AfCTA is effected as Kenya will lose
an estimated tariff revenue loss of 3.2 percent, which is an equivalent
of 0.6 percent of the total national revenue,” Dr Andrew Mold, the
acting director of UNECA said in Nairobi on Thursday during the launch
of the report.
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