Following the May 5 decision by East African Community Finance ministers to adopt a 35 percent rate for the fourth band of the region’s common external tariff (CET), member countries are working to identify, review and impose new taxes on imported goods to protect local industries.
The CET’s four bands include one for raw materials, which attract zero percent tax, intermediate goods that attract 10 percent tax; secondary intermediate goods charged at 25 percent tax and finished goods, the fourth band, which now stands at 35 percent reports www.theeastafrican.co.ke
“The process of identifying which products fall in the fourth band is now complete. Most of the products under this band are readily available in the region and, therefore, will attract more tax to import,” said Betty Maina, Kenya’s Cabinet Secretary for Trade, Industrialisation and Enterprise Development.
Among the tariff lines in the fourth band are furniture, leather products, fresh-cut flowers, fruits and nuts, sugar and confectionery, coffee, tea and spices, textiles and garments, head gear, ceramic products and paints.
The maximum tariff band at 35 percent was considered as the most appropriate rate as it has the most positive impact on regional growth long term.
“The 35 percent tariff significantly eliminates the use of Stays of Application (SOAs) since some of the EAC partner states are currently applying 35 percent tariff rates on over 50 percent of those products that qualify for the fourth tariff band,” Ms Maina, who is also chairperson of the EAC Council of Ministers, said.