The cost of buying fish will rise by 50 percent if Parliament approves a proposal to introduce excise duty at Sh100,000 per tonne to shield the local market from cheaper Chinese imports.
The Kenya Association of Fish Importers, Processors and Exporters told MPs that imposing excise duty on fish imports will push the cost of buying fish by at least 50 percent.
The Treasury, through the Finance Bill 2023, proposes an excise duty on imported fish at the rate of 20 percent of the cost, insurance and freight or Sh100,000 per tonne, whichever is higher.
Currently, fish is categorised under exempt supplies.
“The proposal to impose an excise on fish by Sh100 per kilogramme would make the price of fish skyrocket and out of reach of Kenyans,” said John Msafari, chairman of the Kenya Association of Fish Importers, Processors and Exporters.
“This proposal will further increase the price of fish by 50 percent. In essence, the price of fish shall have doubled compared to 20 months ago, rendering fish expensive.”
The importers said they spend Sh5.2 million to land a 40-feet container with 26 metric tonnes of tilapia fish at Mombasa port and that the excise duty would push the prices to Sh7.8 million.
For a 40 feet container with 26 metric tonnes of mackerel fish to land at the port, the importers said the cost would rise to Sh7.8 million from the current Sh5.1 million.
George Okeyo, a fish importer, told the committee chaired by Molo MP Kuria Kimani that if the new excise duty proposals pass, it would require additional 50 percent working capital to import the same quantity of fish.
“Currently, the imported fish attract import duty of 25 percent, CIF value, VAT of 16 percent, Import Declaration fees of 3.5 percent, Railway Development Levy fees of 2.5 percent, Miscellaneous Fees Levy of 2.2 percent and Fisheries Levy of 5 percent, making a total of 54.2 percent,” Mr Okeyo told the committee that is receiving public views on the Finance Bill, 2023.
Mr Okeyo said fish imports in 2021 stood at Sh2.47 billion out of which Sh1.13 billion was paid in taxes.
The fish importers want the proposed excise duty scrapped to allow duty-free fish imports for human consumption for three years to meet the current demand deficit and increase per capita fish consumption as local farmers work towards increasing production.
“The demand for fish in Kenya is increasing and currently stands at 500,000 metric tonnes against 163,745 metric tonnes of fish produced locally. Out of the 163,745 metric tonnes produced, 10,782 is exported leaving approximately 150 metric tonnes to be consumed locally. This creates a deficit of 350,000 metric tonnes annually,” Mr Okeyo said.
The importers said data from the Fisheries Department indicate that there is a huge demand deficit of 350,000 metric tonnes which cannot be met by the country given that only 21,000 metric tonnes is imported.
The imposition of the import tax will make Chinese fish more expensive in the local market.
Chinese fish have always been cheaper with a wholesale price of Sh250 per kilo against the local one that sells for Sh320. This pushed some consumers to import.
The proposed imposition of tax on fish imports comes in the wake of a proposal by Alego Usonga MP Samuel Atandi who wanted the First Schedule of the Excise Duty Act, 2015 amended to introduce excise duty on imported fish.
“Fish imports from China and other European countries are estimated to be Sh5 billion annually. Yet Kenya is not getting any revenue from the transactions,” Mr Atandi said.
The Department of Fisheries has already warned prices of fish will increase significantly should Parliament pass Mr Atandi’s Bill introducing a 20 percent tax on imports.
