Proposed 35% Excise Duty Opposed by Construction Industry in Kenya
Kenya: The Kenyan construction industry is opposing a proposed 35% excise duty on essential building materials, including tiles, sinks, and toilets, as outlined in the Tax Laws (Amendment) Bill 2024. Stakeholders warn that the new tax structure—35% or Sh100 per kilogram for sanitary ware and 35% or Sh300 per kilogram for ceramic tiles—could devastate the sector, already pivotal for the country’s economic growth.
During public consultations with Parliament’s Finance Committee, industry representatives argued that Kenya’s local manufacturing capacity is insufficient to meet demand, making the tax an undue burden on businesses and consumers. They caution that the increased costs will render products unaffordable, triggering a decline in sales, significant job losses, and reduced tax revenues.
Despite recognizing the need to support local manufacturers, stakeholders criticized the lobbying efforts by a few manufacturers to increase import taxes, claiming it would disproportionately benefit select players while harming the broader industry. Tile sellers, who have invested heavily in showrooms and logistics, fear that these amendments could jeopardize their operations.
The bill, currently under public participation, has been presented as an attempt to balance economic goals and public sentiment after the Finance Bill 2024 faced rejection.
Source: MWakilishi