Bread to cost Ksh.80 if proposed excise duty on cooking oil passes, manufacturers warn

Bread to cost Ksh.80 if proposed excise duty on cooking oil passes, manufacturers warn

A picture shows slices of bread. (Photo by AFP)

Local edible oil manufacturers have warned that the proposed 25 per cent excise duty on vegetable oils under the 2024 Finance Bill will shoot the price of cooking oil up 80 per cent.

In a statement on Sunday, the manufacturers said the duty, which targets both raw materials and refined cooking oils, will make the commodity too expensive and out of reach for millions of Kenyans.

They warned that it would have a ripple effect on the cost of common food items such as bread. If the bill is passed, the price of a 400-gramme loaf of bread will climb from the current Ksh.70 to Ksh.80, for instance.

“The proposed excise duty will also lead to sudden price increases for other essential household products whose raw materials are from vegetable oils like soaps, with the price of long bar soap increasing from the current Ksh.180 to Ksh.270 and margarine (250g) from Ksh.160 to Ksh.300,” they said in a statement on Sunday.

The manufacturers want the 25 per cent excise duty tax on vegetable oils scrapped, arguing that it will stifle local edible oil production.

They termed it against the government’s policy of promoting local value addition to agribusiness in the country.

The 2024 Finance Bill is sponsored by Molo MP Kimani Kuria, who also chairs the National Assembly Finance Committee.

It seeks to introduce new levies including a motor vehicle circulation tax, VAT on bread and increased excise taxes on spirits, cigarettes, M-Pesa, airtime and bank transfers, among others.

Among the legislations it seeks to amend are the Income Tax Act (Cap.470), the Value Added Tax Act (Cap.476), the Excise Duty Act (Cap. 472), the Tax Procedures Act (Cap. 469B) and the Miscellaneous Fees and Levies Act (Cap.469C).

Others are the Affordable Housing Act (No.4 of 2024), the Industrial Training Act (Cap. 237), the Data Protection Act (Cap 411C), the Public Finance Management Act (Cap.412), and the Kenya Revenue Authority Act (Cap.469).

The bill’s public participation deadline has been set for May 28.


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