Treasury Proposes 35% Tax Increase On Vital Imported Construction Products
Pressure and concerns are rising over the Treasury Ministry’s proposal to levy a 35% excise charge on imported vital construction materials such as ceramic sinks, toilets, tiling, washbasins, baths, and urinals.
The Treasury recommends imposing excise duty in the proposed modifications to the First Schedule to the Excise Duty Act, 2015, a move that has sparked opposition from building industry stakeholders.
Experts warn that if the excise duty is implemented, the cost of building would rise, particularly for new homes, further affecting the economy, which is now in upheaval.
Construction stakeholders strongly oppose the excise duty.
This proposal is part of the Tax Laws (Amendment) Bill 2024, which aims to broaden the tax base and raise government revenue by levying excise charges on a variety of items.
WE ARE back at it again! The raising of cost of construction. At every slightest opportunity, government shamelessly increases our cost of construction, since 2017. This time it’s going to be tiles and sanitary ware.
— Okowa Nashon (@OkowaNashon) November 29, 2024
Let’s look at what’s being proposed in this amendment bill… pic.twitter.com/3HeJvoNVKX
The ideas have provoked intense opposition from building firms, who are now attempting to voice their displeasure with the Parliament’s Finance Committee.
Real estate enterprises in the construction sector are concerned that Kenya’s existing manufacturing capacity is insufficient to meet demand for these key items.
However, they applauded the suggestions, which may boost the local manufacturing industry.
Stakeholders are further disturbed by the implementation of the recommendations, which they claim, aside from increasing the cost of building, the 35% tariff will precipitate the dissolution of several enterprises in the real estate sector.
According to industry leaders, such huge tax increases threaten the existence of Kenya’s building and construction business.
In their recommendations to the Finance and Planning Committee, industry representatives stated that the additional expenses would make ceramics more expensive for many consumers, resulting in a substantial drop in sales.
The Excise Duty Act of 2015 was developed to levy taxes on particular goods and services in Kenya.
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The act seeks to regulate and limit the consumption of specific products while also earning cash for the government.
The First Schedule lists commodities subject to excise duty, which range from alcohol and tobacco to luxury goods such as pottery.
The introduction of excise duty on ceramic sinks and toilets may result in increased expenses for importers, which they may pass on to consumers, increasing the cost of construction.
As these changes materialize, stakeholders such as importers, consumers, and local manufacturers will need to negotiate them with caution.
Treasury Proposes 35% Tax Increase On Vital Imported Construction Products
