Kenya will be facing a huge loss in revenue following the ratifications of the Economic Partnership Agreement with the United Kingdom. The National Assembly ratified the EPA on Tuesday, opening the local market to about 1,934 products from the UK, whose import tariff will either be lowered or zero-rated. This pact which is set to expire in 25 years was adopted when the country was facing challenges in financing its obligations.
The EPA does allow for gradual and partial reduction in the mentioned tariffs from 95% of the basic duty followed by total elimination, fears abound that a majority of imports are likely to be subjected to zero duty at the point of entry. Econews Africa, a think-tank that advises governments on economic matters, says the expected revenue losses will be tragic to the country that is already in economic doldrums.
This is notwithstanding that the MPs have already approved the 2021 Budget Policy Statement (BPS) that provides mechanisms for government expenditures and revenue for the 2021/22 financial year.
Mr Edgar Odari The director of Econews asked this question “Custom duties on products from the UK will have to go down at the coming into force of the EPA. How has the government committed to accounting for this in the budget?”
There is a number of products where the duty will either be reduced or eliminated and they are chicken, pork, virgin oil, zinc oxide, vegetable seeds, motor and aviation spirits, zinc peroxide, crude oil, petroleum oils, fats of sheep or goats apart from this there are also other products which are sulphate of aluminum, flat rolled products of iron or non-alloy steel, oil or petrol filters for internal combustion engines, electro-thermic coffee or tea makers for domestic use, toasters, smart cards, wire and cables.
