Fruit juice manufacturers have rejected the Kenya Revenue Authority (KRA) decision to increase import duty on products used in the manufacture of ready-to-drink juices.
They said KRA has increased duty from 10 percent to 25 percent, which sees consumers foot the extra costs.
The reclassification of duty charged on semi-processed products used for juice manufacturing, they said, will raise juice prices and kill the local sector.
KRA in November last year reclassified ready-to-drink juices that are manufactured locally from a lower to a higher tariff.
It moved the products from tariff code HS 2106.90.20 to code 2009 which is for finished products and attracts 25 percent duty.
“By shifting HS code to attract higher duty, you are not only raising the prices of juice but killing the local industry and jobs,” Kimani Rugendo, whose company, Kevian Kenya manufactures Pick N Peel juice said.
KRA classified Multifruit compound, Multivitamin compound, Mango compound and Apple type ginger compound under tariff code 2009.
“This is quite unfortunate bearing in mind that importers of finished juices are also paying 25 percent import duty and hence this will kill the manufacturing sector as people will now be manufacturing in countries with lower production cost and exporting the products to Kenya.
“Some of these countries are members of Comesa and these goods will be coming duty-free, completely killing the manufacturing sector.
“It will be worse as this is coming at the time that Kenya is preparing to enter into the Africa Continental Free Trade Area,” Mr Rugendo said.
Mr Rugendo said the classification will allow importers ship in finished juices from countries with lower production costs such as Egypt.