Tax cuts on rice and wheat imports here to stay, says minister

Pakistan, on the other hand, has for many years been the largest buyer of Kenyan tea.

For instance, in the first quarter of 2010 Pakistan remained among the highest buyers of Kenyan tea.

To support this arrangement, for many years Kenya and other East African Community nations have pegged the common external tariff (CET) on rice imports at 75 per and an extra preferential 35 per cent import duty in line with provisions of the harmonised community description and coding system.

In his 2010/11 budget, Mr Kenyatta lowered the duty on rice imports to the country to 35 per cent from 75 per cent but only on a temporary basis — over the next twelve months.

“Our tea and rice trade with Pakistan is sensitive and we must deal with caution,” Mr Kenyatta told Parliament.

In a move targeted at protecting their own growers, Kenya, Tanzania and Uganda unsuccessfully tried to begin charging a duty of 75 per cent on all rice imports entering their markets from January 1, 2005.

This drew the wrath of Pakistani rice exporters who pressured their government to arm-twist Kenya into deferring the duty or slap them with a reciprocal raise in the import duty of tea.

Kenya threw in the towel first and submissively approached its fellow EAC members to shelve the import duty plans for some time until June 30, 2009.