Member States fail to fully effect new tariff rules

The study concluded: “We see that elimination of Ugandan and Tanzanian tariffs on Kenyan imports would result—as expected—in higher increases of imports from Kenya. For Tanzania, the increase would be twice as large at 3.07 per cent; for Uganda, imports from Kenya increase by 6 per cent.”

The increases have been actually higher than this study predicted.

Kenya’s exports to EAC have expanded by Sh20 billion or 31 per cent to Sh84 billion in 2008 compared to 2004.

Although smaller in absolute terms, relative Kenyan imports from the region have risen by Sh10 billion or over 200 per cent during the same period to Sh13 billion.

With regard to Tanzania, Kenya exported Sh29 billion worth of goods in 2008 compared to only Sh17 billion in 2004 – meaning that it would have lost 25 per cent or about Sh7 billion (TSh120 billion) if it charged no duty on the same goods or about 2.4 per cent of the total tax revenue for the country for 2009/10.

On the other hand, Kenya — the region’s largest economy— would lose only Sh1.8 billion if the customs union denied it tax revenue due from imports from Tanzania.

GM’s general manager for regional integration, Mr Gerald Muli, said in an earlier meeting with journalists that some products, including vehicles, were not being allowed duty-free among the member countries of the EAC customs union.

“We need harmonised age limits and access for vehicles coming into member countries,” said Mr Muli.