The government has moved in to remove the excise tax on imported eggs, onions and potatoes in a bid to lower the prices of the products, offering relief to Kenyans and easing trade wars with neighbouring countries.
The Treasury has through the Finance Bill, 2025 proposed to remove the tax which is charged at a rate of 25 percent on the value of each of the products, in what is likely to trigger price reductions of the commodities.
Kenya introduced excise tax on the products via the Finance Act of 2023, leading to price increments and hitting producers in Uganda, Tanzania and Egypt. Uganda and Tanzania hit back with a raft of taxes on agricultural products from Kenya.
Removal of excise duty on these products will lower their prices and ultimately trigger a drop in the cost of putting food on the table for most families amid a depressed spending power.
It (removal of the taxes) will however heighten competition for local farmers given the expected drop in the prices of imported eggs, potatoes and onions.
“Part 1 of the First Schedule to the Excise Duty Act is amended by deleting the following tariff descriptions and their corresponding rates of excise duty appearing immediately after the tariff description ‘Articles of plastic of tariff heading 3923.30 and 3923.90.90,” the Finance Bill, 2025 reads in part.
For example, a kilo of potatoes went for an average of Sh126.48 in March this year compared to Sh107.98 two year ago. This was largely attributed to a host of factors notably imposition of the tax and supply hitches.
Tanzania is a major source of onions sold in Kenya while Kampala exports vast quantities of eggs to Nairobi. Zambia and Egypt are major sources of the potatoes consumed in Kenya.
The changes in the Finance Bill, 2025 will also see Kenya remove excise duty on imports of potato crisps and chips.
Removal of the taxes is key to ending trade spats that have pitted Kenya against Uganda and Tanzania. The spats between the three have also extended to non-tariff barriers, prompting the intervention of the heads of State and the respective ministers of Trade and Finance ministers.
Currently, Tanzania is charging duty on eggs, sausages and milk that are imported from Kenya while Uganda charges tax on Irish potatoes from Kenya.
Besides the taxes, Tanzania has in the past hit Kenyan farmers with stringent verification checks for the quality of agricultural products.
The Treasury had in May last year promised Finance ministers in the East African region that it would remove the tax as part of ending trade spats that have derailed intra-regional trade.
Former Treasury CS Njuguna Ndung’u revealed that the removal of the taxes was part of the agreement made with his counterparts from the East African region last year.
