Bread Prices Set to Soar: Ksh.80 if Cooking Oil Tax Passes, Warn Manufacturers
Local edible oil manufacturers have cautioned that the proposed 25 percent excise duty on vegetable oils under the 2024 Finance Bill will increase cooking oil prices by 80 percent.
In a statement on Sunday, they noted that this duty, affecting both raw materials and refined cooking oils, would make the product too expensive for millions of Kenyans.
They emphasized that this would have a domino effect on the cost of staple foods such as bread. For example, if the bill is enacted, the price of a 400-gram loaf of bread would rise from the current Ksh.70 to Ksh.80.
“The proposed excise duty will also result in sharp price hikes for other essential household items that use vegetable oils as raw materials, such as soaps, with the price of long bar soap rising from Ksh.180 to Ksh.270 and margarine (250g) from Ksh.160 to Ksh.300,” they stated on Sunday.
The manufacturers are calling for the elimination of the 25 percent excise duty on vegetable oils, arguing that it will hinder local edible oil production.
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They argued that this move contradicts the government’s policy of supporting local value addition in agribusiness.
The 2024 Finance Bill was introduced by Molo MP Kimani Kuria, who also chairs the National Assembly Finance Committee.
The bill aims to introduce new taxes including a motor vehicle circulation tax, VAT on bread, and higher excise taxes on spirits, cigarettes, M-Pesa, airtime, and bank transfers, among others.
It proposes amendments to several legislations, including 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).
Other acts targeted for amendment 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 deadline for public participation on the bill is set for May 28.
Bread Prices Set to Soar: Ksh.80 if Cooking Oil Tax Passes, Warn Manufacturers