01/08/2024 (People Daily) - Manufacturers of  vegetable oil now want the government to remove the 10 per cent duty on crude  palm oil.

The new tax has been introduced under the East Africa Community Common External Tariff with only Kenya and Uganda implementing it.

The  Edible Oil Manufacturers Association of Kenya has protested that the duty has increased costs of importing crude oil and in the process forced them to increase the price of the essential commodity.

“Consumers will feel the impact through price hikes on cooking oil and other end products made from crude palm oil,” said Billow Kerrow, the chairperson of the association.

The new rate took effect from the start of last month as the EAC agreed to a proposal by Kenya to hike the rate from the previous zero rate under the common external tariff (CET).

Price of a 20-litre jerry can of the commodity has since jumped to Sh4,200 from Sh3,800 following the new tax, as manufacturers grapple with increased costs which set the stage for higher consumer prices.

“We have written to the National Treasury to have this tax removed because this is making the costs of living go up by increasing prices of a critical commodity like cooking oil,” said Kerrow, who is also the chairman of the Darfords Industries Limited.

Imposition of the duty will also undo the steady price drops on  vegetable oil and related products that Kenyans have been enjoying on a combination of the strengthening shilling and major source markets like Indonesia lifting caps on import quotas of crude  palm oil.

Darfords Industries manufacture  cooking oil and other end products from the refining of crude palm oil like soap, margarine and cosmetics.

The 10 per cent import duty is one of the new taxes that were imposed on various imports under the CET.

Import duty

Edible oil manufacturers also questioned Kenya’s decision to apply for the new tax given that the country fully imports crude palm oil.

The association noted that the introduction of the new import duty will lead to significant price increases for cooking oil, an essential staple household for millions of Kenyans.

“With cooking oil also being an important component in production of essential everyday products like soap, bread, mandazi, chapatis and margarine the prices of these essential household products will also go up and further push up the cost of living for millions of struggling Kenyans,” lamented Kerrow.

Vegetable oils were also a target in the rejected Finance Bill 2024 which had proposed the introduction of a punitive 25 per cent tax on both raw and refined  vegetable oils.

“The abrupt introduction of these new taxes on crude palm oil and other vegetable cooking oils was done secretly, without any public participation and will increase the cost of living for millions of Kenyans and push them further to deeper financial distress,” noted the manufacturers.

 Read the statement, “In view of the ongoing uproar and demonstrations against tax hikes across the country, we call upon the government to urgently seek a stay of execution of these new taxes as this single act will cushion millions of Kenyan consumers, especially the vulnerable ones against imminent significant price hikes for these essential household products.”

https://peopledaily.digital/agency-calls-for-removal-of-10pc-tax-on-crude-palm-oil/