Trade Cabinet Secretary Moses Kuria is now proposing the removal of the 35 per cent duty on edible oils as a way of supporting local manufacturers.
Kuria, in a statement on Tuesday, June 20, 2023, wants the tax on imported crude oil substituted with 10 per cent export and investment promotion levy.
In a letter addressed to his Treasury counterpart Njuguna Ndung'u, Kuria said if implemented, the move will greatly support local manufacturing in the edible oils value chain.
"It is proposed that we remove the 35 per cent duty on crude oil and instead introduce 10 per cent exports and investment promotion levy on imported crude oil. This levy, introduced on selected goods which local manufacturing industries have the capacity to produce, is meant to incentivize investments in local manufacturing," according to Kuria's letter.
According to the Trade CS, the introduction of the levy on edible oils will also create a more level pricing of the basic food commodity.
The CS also recommended the proposed substitution to be effected once the exports and investment promotion levy comes into effect stating that it will contribute to the growth of palm, soya and sunflower farming.
Kuria said despite measures created by the government to stabilise prices of essential household goods, the importation of crude oil into Kenya which is estimated at Sh102 billion continues to hold back local manufacturing of basic food commodities.
Kuria's statement comes on the backdrop of an edible oils importation scandal, which revealed how private firms import oil tax-free, and sell the commodity to State agencies at a higher fee.