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30 July 2018 The East African Community amends customs duties and common external tariffs The East African Community (EAC) Council of Ministers (the Council) have agreed on changes to the EAC Customs Management Act, 2004 (EACCMA) and the EAC Common External Tariff (EAC CET). These changes were set forth in the EAC Gazette Notice No. 8 of 2018 (the Gazette) released by the EAC Secretariat on 30 June 2018 and came into effect from 1 July 2018. These respective changes impact both individual EAC Member States and the EAC region as a whole. This Alert highlights the international trade-related changes introduced by the Gazette across Kenya, Uganda, Tanzania, Rwanda and Burundi affecting importers.
Effective 1 July 2018, the Gazette also introduced specific and general exemptions from import duty under the Fifth Schedule of the EACCMA covering:
The Council has stayed the application of conditions contained in Legal Notice LN EAC/39/2013, pertaining to duty remission on the motorcycle assembly industry, for one more year. The Legal Notice provides for duty remission for assemblers of CKD kits who procure/ manufacture the following specified parts within the EAC; main frame, suspension, or a combination of seat and seat frame, mudguard, wheel rim, break gear and exhaust pipe. The council has also revoked the application of the conditions contained in item 12 of Legal Notice LN EAC/32/2016 which was supposed to progressively reduce the levels of remission granted to gazetted importers of sugar for industrial use from 90% (current) remission to 85%, 80% up to 75% remission of 100% duty. The EAC duty remission scheme allows waiver of duty or refrainment from exacting of duty on gazetted inputs imported by gazetted users. The gazette stipulates items approved by the Council to be imported at a lower rate under remission in accordance with Section 140 of EACCMA and the EAC Duty Remission Regulations, 2008. The following items have been granted duty remission and are available to all EAC countries provided importers are approved and gazetted before importation: In the event that finished products (manufactured using inputs importer under country specific remission are sold in the EAC Customs territory, such goods shall attract duties, levies and other charges provided in the EAC CET. The Council has approved various stays of application of CET duty rates on select items in Kenya, effective for the one year period from 1 July 2018. These measures, effected to address specific economic needs, have a twofold effect; either an increase or a decrease in duty rates as follows: The Council has approved various stays of application of CET duty rates on select items in Uganda, effective for the one-year period from 1 July 2018. These measures, effected to address specific economic needs, have a twofold effect; either an increase or a decrease in duty rates as follows: The Council has approved various stays of application of CET duty rates on select items in Tanzania, effective for one-year period from 1 July 2018. These measures, effected to address specific economic needs, have a twofold effect; either an increase or a decrease in duty rates as follows: The Council has approved various stays of application of CET duty rates on select items in Rwanda, effective for the one-year period from 1 July 2018. These measures, effected to address specific economic needs, have a twofold effect; either an increase or a decrease in duty rates as follows: The Council has approved various stays of application of CET duty rates on select items in Burundi, effective for the one-year period from 1 July 2018. All measures granted to Burundi were decreases in applicable duty rates as follows: Each EAC Member State, like any other economy, is challenged every year to widen its tax base. Whereas higher tax rates are introduced to protect local industries and other new taxes are introduced to cast the net farther, it is likely that the need to widen the tax base will continue in the foreseeable future until countries become less reliant on borrowed funds to finance their budgets.
Document ID: 2018-5914 | ||||||||||||||
