EAC Ministers Approve Increase in Customs Duty on Cooking Oil Amidst Controversy
In a contentious move that has sparked criticism from regional business leaders, the East African Community (EAC) Council of Ministers has approved an increase in customs duty on cooking oil, effective today.
The decision, finalized on June 30, 2024, raises the import duty on cooking oil across EAC member states. This policy shift has been met with significant backlash from the private sector, particularly small and medium-sized enterprises (SMEs), who argue that the hike will further strain the region’s already fragile economic environment.
John Bosco Kalisa, Chief Executive Officer of the East African Business Council, has been vocal in his criticism of the new tax measure. Kalisa contends that the increase in customs duty is a misstep that could damage the economies of EAC member states.
Kalisa argues that any adjustments to tax rates should be both economically and socially justified, pointing out that the current regional tax structures have impeded the growth of the private sector and narrowed the tax base. “They get it wrong and are killing the economies,” Kalisa stated. He further criticized the decision for its lack of effective consultation with the private sector and the general public. “Minimal or lack of effective consultation with the private sector and the entire citizens is the core issue,” he added.
Kalisa also highlighted that recent Generational Z issues should serve as a wake-up call for policymakers. He believes that increased consultation and engagement with stakeholders are essential for effective tax administration and economic policy formulation.
The increase in customs duty on cooking oil comes at a time of rising concerns over the cost of living and economic stability in the region. Critics fear that the new tax will lead to higher prices for consumers and exacerbate existing economic challenges for businesses.
As the policy takes effect, stakeholders and policymakers will be watching closely to see the impact on the regional economy and the broader implications for EAC member states’ economic health.
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