East African countries Uganda and Tanzania are being accused of restricting trade in the East African Community (EAC) after the two recently imposed taxes on Kenyan-made confectionery products like biscuits, ice-cream, sweets, over claims that imported industrial sugar is used to produce those goods.
Certificates of origin issued by the Kenya Revenue Authority (KRA) have been rejected by the two states who have now chosen to levy 25 per cent import duty on Kenyan confectioneries, news site Business Daily reports.
In the East Africa Community common market made up of Tanzania, Kenya, Uganda, Rwanda and Burundi, free movement of locally manufactured goods within the bloc is allowed.
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But authorities from Tanzania and Uganda have accused Kenyan manufacturers of trying to win the competition to their side by using industrial sugar imported under a 10 percent duty remission scheme as the region does not produce industrial sugar.
But Kenyan manufacturers have argued that Uganda and Tanzania are only using the customs taxes to restrict trade.
“This is an EAC-wide remission scheme that is available to all manufacturers in the region.
“We are not supposed to pay duty when we sell in the region because our competitors in the region also rely on industrial sugar imported under the same remission scheme,” the Kenya Association of Manufacturers (KAM) chief executive Phyllis Wakiaga was quoted by the Business Daily.
The KRA’s officer in charge of exports Julius Kihara also said the manufacturers should be safe from taxes as long as the trade volume falls within the 20,000 metric regional quotas.
This is not the first time certificates of origin from Kenya are being rejected in the region. Acceptance of the certificates assures that Kenyan goods enter Uganda and Tanzania tax-free.
But last year, firms producing items like textiles, lubricants, and cement went through the similar restriction issues.