Fresh wave of Inflation expected as Government imposes new Levies on imports

PHOTO: Courtesy

Kenyan businesses heavily reliant on imports are set to readjust their accounts, as increased charges for railway development and product declaration outlined Finance Act 2019 are set to take effect.

The taxman, Kenya Revenue Authority has issued new Railway Development Levy (RDL) rates now at two percent, up from 1.5 percent, and the import declaration fee (IDF) to 3.5 percent, from two percent.

“The rate of RDL has been increased on all imported goods except raw materials and intermediate goods while the rate of IDF has increased to 3.5 per cent with effect from 07 November 2019,” reads part of the reminder notice to importers.

According to the Executive Officer of the Shippers Council of Eastern Africa, Gilbert Langat said the impact will eventually be amounted to double taxation on importers.

“We are being encouraged to import in bulk but we can no longer afford to import large quantities since each item is subjected to about Sh5,000 advance IDF and this will be very expensive to traders who import millions of units.” Said Mr. Langat.

The deal also sought to cushion local manufacturers from RDL as importers of finished goods incurred the enhanced charges.

In reports on businesses and imports, Kenya heavily relies on importation of manufactured goods including clothes, utensils, electronics and vehicles; and food stuffs.