Importing commodities such as iron and steel will now cost more as the government moves to raise railway development levy on finished products from 1.5 per cent to two per cent in a bid to cushion local firms.
Treasury secretary Henry Rotich’s budget was generous to local manufacturers while proposing protectionist tax measures in line with promoting the Big Four agenda’s manufacturing pillar.
Mr Rotich at the same time proposed import declaration fee on intermediate goods and raw materials used by manufacturers be cut from two per cent to 1.5 per cent.
He noted that Kenya’s metal and allied sector continues to face stiff competition from imported cheap and subsidised iron and steel products.
Mr Rotich therefore retained the ad valorem (tax levied in proportion to the value of goods) rate of import duty on these products at 25 percent with corresponding specific rates of duty in a wide range of other metallic products that are produced in the region.
He also retained an ad valorem rate of import duty on timber and furniture products at 25 per cent to protect the local industry from proliferation of cheap finished products.
Further, Mr Rotich extended 25 per cent import duty on paper and paper board products noting that Kenya has sufficient capacity to produce these products and therefore the need to protect local firms.