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Treasury ban hits dealers of imported furniture

Treasury Cabinet Secretary Ukur Yatani
Treasury Cabinet Secretary Ukur Yatani. FILE PHOTO | NMG 

Imported furniture dealers have been dealt a blow after the National Treasury issued a directive compelling all government agencies to purchase only locally manufactured fittings.

Treasury Cabinet Secretary Ukur Yatani also ordered public offices to cut purchase of new furniture by 75 percent over the next three years.

“All provision for purchase of furniture should be reduced by 75 percent for the next three years. In addition, any purchase of furniture be restricted to locally manufactured products,” he said in a memo seen by the Business Daily.

The directive is one among many orders issued towards the end of last year as part of the government’s austerity measures that seek to control the budget.

The order on furniture spend also comes at a time the government has put in place tax measures that are meant to curb importation of furniture.

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Treasury raised import declaration fee on finished goods such as furniture from two to 3.5 percent in the current fiscal year.

The government also retains an ad valorem rate of import duty at 25 percent charged on the value of furniture production while cutting duty on raw timber from 10 percent to zero.

Kenya sources most of its furniture from Asia and the Middle East.

Official data shows the value of furniture, and related items including bedding and mattresses declined only marginally to Sh6.23 billion in the first nine months of 2019 compared to Sh6.47 billion in the same period the previous year.

The huge import bill for furniture is a blow to the local Jua Kali sector that has been looking to the fiscal measures to change its fortunes.

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