Kenya, Tanzania and Uganda are still squabbling over the implementation of the Common Market provisions, despite officials saying a lot of ground has been covered in resolving the issues.
This came as Kenyan sugar-based products were denied preferential access to Uganda and Tanzania over the application of the Rules of Origin.
For the fourth consecutive month, Cerelac, juice, ice cream and chewing gum from Kenya could not get preferential access to the Tanzanian market.
A month ago, Uganda denied Kenyan confectionaries preferential access, arguing that Common External Tariff (CET) should be levied on the products since they were manufactured from industrial sugar imported under a 10 per cent duty remission scheme.
Citing a 2017 legal notice, where Kenya was granted duty remission on raw sugar at a duty rate of 0 per cent for one year to manufacture sugar for industrial use, Tanzania is demanding full CET duties of 25 per cent on the products instead of the free access granted to products that meet the EAC origin criteria.
However, Kenyan manufacturers argue that the products are not made from raw sugar but rather from industrial sugar imported under the EAC wide duty remission, which attracts 10 per cent levy.
The Kenya Revenue Authority (KRA) argues that only one Kenyan company, which was supposed to produce refined sugar, benefited from the provision for imports under the 0 per cent levy. The firm has yet to utilise to the opportunity.
“The denial of entry for Kenyan goods into Tanzania continues despite KRA’s intervention to clarify the matter to its Tanzanian counterpart,” said the Kenya Association of Manufacturers (KAM), adding,
“KRA has provided detailed information with evidence that manufacturers of the affected products have been subjected to the 10 per cent duty as they fall under EAC duty remission scheme, and confirmed to the Tanzania Revenue Authority that the 2017 legal notice applies to sugar for home use not white industrial refined sugar.”
KAM said the denial of entry of Kenyan products into Tanzania has caused severe losses to businesses and reduced trade between the two countries thereby undermining efforts towards regional integration.