This followed President William Ruto's administration's move to impose a 10% import duty on crude palm oil.
According to the East African Gazette Notice published on Sunday, June 30, 2024, Kenya applied to raise the duty on crude palm oil from 0% to 10%.
Which products will increase prices?
The country received a nod on the common external tariff (CET), joining Uganda, which raised its import duty on the key raw material used in the manufacturing of cooking oil, soap, margarine and some cosmetics.
"Uganda and Kenya to stay application of the EAC CET rate of 0% and apply a duty rate of 10% for one year," read the Gazette notice part.
On other palm oil refined products, Kenya will stay at the 25% EAC CET rate and apply a duty rate of 25% or US$500 (KSh 64,632) per metric ton, whichever is higher, for one year.
How much will 1 litre of cooking oil cost Read
The imposition of the new tax could raise the prices of cooking oil, soap, margarine, and glycerine cosmetics.
A spot check by TUKO.co.ke showed that a litre of cooking oil retails at KSh 330
Data from the Kenya National Bureau of Statistics indicated that a litre of cooking oil retailed at an average of KSh 326.36 in June 2024, as inflation eased to 4.6%.
The 10% import duty on crude palm oil could see manufacturers pass on additional operation costs to consumers, raising the price to KSh 360 per litre.
Why Ruto's govt raised palm oil import tax
The move came after Ruto declined to sign the controversial Finance Bill 2024. The president said the withdrawal of the Bill would pose a budget deficit of KSh 346 billion, which needs austerity and other revenue-raising measures.
Speaking exclusively to TUKO.co.ke, tax expert Keboi Rotuk noted that Kenya has no option but to adjust tax rates that will enable it collect more to fund the KSh 4 trillion budget.
"They could also seek new ways to increase compliance and aggressive collection, which may enable them to collect more, but that can only be so much compared to the easy low-lying fruits of adjusting rates and taxing at source," said Rotuk.
What manufacturers said about cooking oil import tax
The Bill had contentious clauses that saw cooking oil manufacturers concerned about the import duty proposals on cooking oil.
Appearing before the National Assembly Finance Committee, the Kenya Association of Manufacturers raised issues with several tax proposals they say will negatively impact local manufacturing.
KAM chief executive officer Anthony Mwangi cited four taxes imposed on cooking oil, projecting a hike in prices by over 70%
