Kenya seeks 10pc tax on East Africa milk imports

Traders importing milk from the East African Community (EAC) will have to pay 10 percent of the value as tax if proposed regulations come into force.

The Dairy Regulations 2020, awaiting national validation, have proposed the tax to protect local farmers from dumping of milk.

The regulations that saw the Kenya Dairy Board (KDB) collect stakeholder views state the import permits will be issued on need basis, especially when there is a shortage of milk.

This is the second time the regulations have been brought forward after the first set was rejected in 2018 as being punitive to farmers.

“A person who imports milk or any other dairy produce shall pay to the Board an import levy of 10 percent of gross cost… being the landed value of the milk or dairy produce at the port of entry prior to the release of the milk or dairy produce,” state the regulations.

Failure to pay on time will see the importer pay 25 percent of the value of the consignment for the first months and 12 percent in subsequent months.

This is the first time Kenya will be introducing duty on imports on East African countries, a move that is likely to trigger a trade war with neighbours.

Last December, the Ministry of Trade proposed a 16 percent duty on milk from Uganda to control an influx of the commodity. Kenya has been embroiled in tax war with its EAC partners, especially Uganda and Tanzania, which have been levying duty on some goods from Nairobi.