Kenya: Eastleigh traders feel the pinch of high import tax

Carpets on sale in Nairobi’s Eastleigh

By Business Daily Africa

Traders in the expansive Eastleigh business district have decried the negative impact of increased taxes on key imported items such as electronics, textiles, shoes, and cosmetics.

Eastleigh Business Traders Association chairperson Hajj Hassan claimed that tax on a container of imports has hit Sh3 million, up from Sh1.7 million in 2017.

“This year alone, the government has increased taxs twice; from Sh2.8 million to Sh3 million per container in June, and from Sh3 million to Sh4.4 million per container in July,” he said.

He explained that among the East African Community members, the tax rates on imported goods in a single container are lower than in Kenya. For example, Tanzania charges between Sh700,000 to Sh1 million per container while in Uganda, which transits its goods through the Mombasa Port, the same container is taxed Sh2.5 million.

“This has forced our local traders to relocate their business to the neighbouring East African countries. Thus, negatively impacting our economy,” said Mr Hassan.

“We kindly request for reviews and reconsideration of the current taxation rates on all imported goods. We feel that finding a balance between revenue generations and supporting the business industry’s growth and competitiveness is crucial for our economy,” he added.

He said the government must ensure that its tax policies do not disproportionately affect the business sector and its customers.

“The business industry relies on imported materials for production. Higher taxation on these imports may discourage foreign investors from entering our market, which has potentially hindered economic growth and job creation, therefore, leading to consumers importing goods from Tanzania as the rates are cheaper,” he said.