The Weekly Pulse | 14th February 2020

KAM engages EAC PS Dr Kevit Desai

KAM, led by the CEO – Ms Phyllis Wakiaga and Trade and Tax Committee Chair – Mr Bharat Shah, engaged the State Department for East African Community Principal Secretary, Dr Kevit Desai on Monday, 10th February 2020. The meeting focused on EAC trade challenges facing local industries to grow Kenya’s export markets and develop sound policies.

KAM presented a memorandum on issues affecting industry in the region, which, if timely addressed, would make a positive impact in safeguarding and increasing Kenya’s market access in the EAC region.

The issues discussed include:

1. Finalization of the EAC CET review with a view of promoting value addition and industrialization in the EAC. The Ministry of EAC shall convene a multi-stakeholder consultative forum to develop Kenya’s position.
2. Review of the EAC Customs Management Act (EACCMA). The Ministry shall organize a multi-stakeholder forum for KAM to present its study findings and for stakeholders to agree on the country’s position.
3. Unresolved Non-Tariff Barriers (NTBs)

• The United Republic of Tanzania has imposed discriminative excise duty on Kenyan cigarettes.
• Uganda’s discriminative inspection fees of 12 per cent on Kenya’s pharmaceutical products: Uganda introduced discriminative inspection fees of 12 per cent on pharmaceutical exports into Uganda.
• Uganda’s introduction of a discriminative tax on zero-rated supply of drugs and medicine manufactured in Uganda only vis-a-vis medicine manufactured locally in the EAC region specifically Kenya.
• Uganda charging a discriminatory excise duty of 13% on juices from Kenya that are not made from fruits or vegetables grown in Uganda. This has made Kenya’s products uncompetitive in the market.
• Tanzania introduced new discriminatory import fees levied against animal and animal products vide Animal Diseases (Animal and Animal Products Movement Control) amendment Gazette Notice no. 475, dated 2018. This discriminatory fee subjected to Kenya’s animal and animal products – beef and beef products, milk and milk products – vis-à-vis Tanzania’s products, has increased levies to 4,800 Tsh per Kg of meat (Ksh from 200 – 500) and 1,800 Tsh per Kg of milk among others thus making Kenya products uncompetitive.
• Uganda’s discriminative inspection fees of 12 per cent on Kenya’s pharmaceutical products: Uganda introduced discriminative inspection fees of 12 per cent on pharmaceutical exports into Uganda.
• Uganda’s introduction of a discriminative tax on zero-rated supply of drugs and medicine manufactured in Uganda only.
• Uganda charging a discriminatory excise duty of 13% on juices from Kenya that are not made from fruits or vegetables grown in Uganda. This has made Kenya’s products uncompetitive in the market.
• Tanzania introduced new discriminatory fees levied against animal and animal products vide Animal Diseases (Animal and Animal products Movement Control) amendment Gazette Notice no. 475, dated 2018. This discriminatory fee to Kenya’s (EAC) animal and animal products – beef and beef products, milk and milk products – vis-à-vis Tanzania’s products have increased levies to 4,800 Tsh per Kg of meat (Ksh from 200 – 500) and 1,800 Tsh per Kg of milk among others.
• The discriminatory charges by Tanzania and Uganda are against the spirit of the EAC Protocol where Partner States are required to accord equal treatment to products from Kenya and other Partner States in the EAC region. These discriminative taxes have negatively affected Kenyan pharmaceutical products, juice, beef and beef products and milk into Ugandan and Tanzanian markets.

The PS noted that KAM’s concerns on discriminative excise duties and fees have been discussed at various bilateral meetings. They have also been brought to the attention of the EAC Heads of State Summit. The State Department committed to looking into value chain incentives of engaging in bilateral trade with the specific Partner States.