Kenya has granted the UK a lower tax rate on UK-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 percent tariff on alcohol from the UK in line with the East African Community Common External Tariff (CET).
This is higher than the 25 percent duty that Kenya agreed with the UK under their Economic Partnership Agreement (EPA). This aggrieved the UK, which formally complained to Kenya earlier this year over the higher taxation.
UK High Commissioner to Kenya Neil Wigan has, however, revealed that Kenya and the UK had resolved the issue, and that Kenya has now started to charge the lower 25 percent under the EPA and dropped the 35 percent CET.
“We have worked very closely with the ministry (of Trade) and resolved that. The tariff is now at 25 percent as provided for in our trade agreement with Kenya,” he said.
The British diplomat spoke yesterday during a press briefing on Kenya-UK trade relations.
“In the same way that Kenyan exporters are benefiting from the (duty-free exports of) flowers to the UK, British companies will benefit from what we have resolved,” said Mr Wigan.
Trade Cabinet secretary Salim Mvurya said Kenya and the UK have resolved numerous trade issues, which will bolster trade and investments between the two trading partners.
“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 producers of Scottish whisky, tequila, champagne, and bourbon.
The drinks are protected by a clause in the World Trade Organisation (WTO) agreement that prevents the manufacture of these alcohols in other countries.
This comes at a time when local alcohol firms that import liquor from the UK and sell it locally lamented that the higher 35 percent CET rate charged by Kenya was making the alcohol more expensive and therefore impacting sales.
Kenya and the UK signed the EPA in December 2020. The trade deal was ratified in March 2021.
The EPA 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.
