East Africa raises import taxes on clothing, furniture, steel and other goods

With effect from July 1, the East African Community (EAC) officially implemented the fourth tier of the common External Tariff of 35%. Imports planned to be included include: Dairy products, meat products, cereals, edible oils, beverages and alcohol, sugar and confectionery, fruits, nuts, coffee, tea, flowers, condiments, furniture, leather products, cotton textiles, clothing, steel products and ceramic products, etc.

Previously, the COMMON External Tariff (CET) of the East African Community was divided into three levels, with a tariff of 25% for end consumer goods, 10% for intermediate goods, and 0% for raw materials and capital goods, among which the highest tariff was applied to industrial products such as textiles, steel and automobiles. The East African Community includes seven East African countries: Kenya, Uganda, Tanzania, Burundi, Rwanda, South Sudan and the Democratic Republic of Congo.

The eAC hopes to encourage the development of local manufacturing, value-added products and industrialization in order to stimulate intra-regional trade.

According to The New Times of Rwanda, when the maximum common external tariff rate is raised from 25% to 35%, intra-regional trade revenue of the East African Community will increase by 18.9 million US dollars, employment rate will increase by 0.03%, and trade revenue of member countries will increase by 5.5%. The analysis by the EAC Secretariat indicates that part of the international trade will shift to intraregional trade. Uganda will see the largest increase in trade by US $8.46 million, Kenya by US $5.1 million and Rwanda by US $3.71 million.

Experts analyze that raising tariffs can enhance the diversification of local products and expand the possibility of intraregional trade. At the same time, however, higher tariffs are likely to lead to higher costs for consumer and industrial goods, causing short-term pain for import-dependent businesses and consumers.

In view of the above situation, we hereby remind foreign trade enterprises exporting to Africa that Kenya and Uganda have always been areas with high incidence of commercial fraud in Africa. After tariff adjustment, the import cost will increase, and the risk of exporting to relevant areas may also increase accordingly. Exporters should pay attention to risk prevention.