Fruit juice makers have rejected a decision by the Kenya Revenue Authority (KRA) to increase import duties on products used in making ready-to-drink juice.
They said KRA has raised customs duties from 10% to 25%, which forces consumers to pay the additional costs.
The reclassification of duties levied on semi-processed products used to make juice, they said, will increase juice prices and kill the local sector.
In November last year, the KRA reclassified locally produced ready-to-drink juices from a lower tariff to a higher tariff.
It moved products from tariff code HS 2106.90.20 to code 2009 which relates to finished goods and attracts a 25% duty.
“By changing the HS code to attract higher duties, you not only raise juice prices, but you kill local industry and jobs,” said Kimani Rugendo, whose company, Kevian Kenya, manufactures Pick juice. N Peel.
KRA has classified Multifruit Compound, Multivitamin Compound, Mango Compound and Apple Type Ginger Compound under tariff code 2009.
“It’s quite unfortunate considering that importers of finished juices are also paying 25% import duty, which will kill the manufacturing sector, as people will now be manufacturing in low-cost countries. production and export the products to Kenya.
“Some of these countries are members of Comesa and these goods will arrive duty free, completely killing the manufacturing sector.
“It will be worse because it comes as Kenya prepares to enter the African Continental Free Trade Area,” Rugendo said.
Rugendo said the classification will allow importers to ship finished juices from countries with low production costs such as Egypt.