European Union (EU) countries and the UK are major distillers of scotch whiskey, tequila, champagne, and bourbon.
Kenya has allowed a lower tax rate on Britain-made alcohol such as wines, gin, and whiskies, months after London made an official complaint to Nairobi over higher taxation of some of its products.
Kenya has been charging a 35 per cent tariff on wines, gin, and whiskies from the UK in line with the East African Community (EAC) Common External Tariff (CET). This is higher than the 25 per cent duty that Kenya agreed with Britain under their Economic Partnership Agreement (EPA). This aggrieved the UK, which formally complained earlier this year.
UK High Commissioner to Kenya Neil Wigan has, however, revealed that the two countries have ironed out the issue and that Kenya has now started to charge the lower 25 per cent under the EPA and dropped the 35 per cent CET.
“We have worked very closely with the Ministry (of Trade) and resolved that. The tariff is now at 25 per cent as provided for in our trade agreement with Kenya,” said Mr Wigan.
The British diplomat was speaking yesterday during a press briefing on Kenya-UK trade relations. “In the same way that Kenyan exporters are benefitting from the (duty-free exports of) flowers to the UK, British companies will benefit from what we have resolved,” said Mr Wigan.
Ministry of Investments, Trade and Industry Cabinet Secretary Salim Mvurya said they have resolved numerous trade issues, which will bolster trade and investments between them.
“We will continue to work closely with the UK to ensure we grow our trade. The UK is making major investments in the country including the Nairobi Railways City,” said Mr Mvurya.
European Union (EU) countries and the UK are major distillers of scotch whiskey, tequila, champagne, and bourbon.
These are protected by a clause in the World Trade Organisation (WTO) agreement that prevents the making of these alcohols in other countries.
This comes at a time when local alcohol firms, which import liquor from the UK and sell it locally, had lamented that the higher 35 per cent CET rate charged by Kenya was making the alcohol more expensive and, therefore, dampening sales.
Kenya and the UK signed the EPA in December 2020. The trade deal was ratified in March 2021.
The deal ensures that all companies operating in Kenya, including British businesses, continue to benefit from duty-free access to the UK market following its exit from the EU.
