KAM says proposed 25pc excise duty on edible oils to impact Kenyans negatively » Capital News
Nairobi, Kenya, May 21- The Edible Oil Sub Sector of the Kenya Association of Manufacturers has issued a warning regarding the proposed 25 percent excise duty on vegetable oils included in the Finance Bill 2024.
The association highlighted the severe economic and social repercussions the tax could have on households and the broader industry.
“We urgently call upon the government to scrap the proposed 25% excise duty on vegetable oils from the Finance Bill 2024. This tax is not just an economic miscalculation; it is a potential humanitarian crisis that Kenya cannot afford,” the statement read.
The proposed excise duty is set to apply to both raw materials and refined cooking oils, threatening to significantly increase the price of cooking oil, a staple commodity in every household.
The association predicts that this tax will cause the price of cooking oil to surge by 80%, making it unaffordable for millions of Kenyans, particularly those with low incomes and small-scale traders, commonly referred to as “hustlers” and “mama mbogas.”
“The excise duty will cause a cascading effect on these items, inflating the price of a standard loaf of bread (400g) from Kshs 70 to Kshs 80,”
“Additionally, the price of long bar soap could escalate from Kshs 180 to Kshs 270, and margarine (250g) from Kshs 160 to Kshs 300,”
The association emphasized that such price hikes will disproportionately impact the most vulnerable members of society, exacerbating the already high cost of living and plunging millions into deeper financial distress.
They argue that the proposed tax would undermine the government’s efforts to promote local value addition in agribusiness and could hinder the growth of local edible oil production.
“Cooking oil is not just an isolated product; it is a fundamental ingredient in a myriad of everyday foods such as bread, mandazis, chapatis, and chips,” the statement read.
The edible oils sector is a significant contributor to Kenya’s economy, directly employing approximately 10,000 individuals and indirectly supporting over 30,000 jobs.
The Edible Oil Sub Sector insisted the proposed excise duty poses a risk to these livelihoods and could destabilize the manufacturing industry at large.
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