Kenya Introduces New Import Levies on Building Materials

Kenya Introduces New Import Levies on Building Materials

Kenya: Kenya’s construction sector is set to face higher costs following the introduction of new taxes on imported building materials under the 2025 Finance Act. Signed into law by President William Ruto, the Act imposes a 17.5 per cent export and promotion levy on imported iron bars and non-alloy steel, and a three per cent levy on a range of ceramic and sanitary ware products. Despite appeals from some lawmakers to reduce the steel levy, the National Treasury maintained its stance, citing the need to reduce reliance on imports and promote domestic manufacturing in the steel and housing sectors.

The government expects the policy to support local industry growth, employment, and affordable housing initiatives. Kenya remains a significant importer of iron and steel, with imports from China alone valued at 275.23 million USD in 2023, according to United Nations Comtrade data. Due to limited local processing, manufacturers continue to depend on semi-finished steel imports. The Kenya National Bureau of Statistics reports steel as one of the most expensive construction inputs, with a cost index exceeding 150. The new levies are anticipated to raise construction costs further, especially for developers working on housing and infrastructure projects. The three per cent tax will also apply to commonly used finishing materials such as toilets, sinks, bathtubs, faucets, and tiles. While the government asserts that the measures are aimed at long-term industrial development, some stakeholders have expressed concern about their short-term impact on construction activity.

Source: The Eastleigh Voice