Kenya has resolved to impose a 16 per cent value added tax (VAT) on milk imports from Uganda as part of measures to protect local dairy farmers and calm simmering tensions between the neighbouring nations.
The agreement was reached on Friday during a bilateral meeting of trade officials from the two countries.
“The meeting deliberated on possible measures to remedy the concerns of Kenya and more or less agreed that the VAT be imposed on milk imports into Kenya since the same is imposed by Uganda,” Kenya’s Principal Secretary in the department of trade, Mr Chris Kiptoo, told The EastAfrican.
“[The meeting] noted that this may not raise unnecessary issues of discrimination or retaliation.”
OTHER BARRIERS
During the meeting in Kampala, the two countries also deliberated on other issues hindering trade, including levies and taxes imposed on both local and imported products, such as the road levy, VAT and withholding tax.
Other concerns included delays in clearing goods and issues of parking space at the port of entry, particularly the border post.
“The meeting underscored the need for harmonisation and a meeting of all relevant ministries and departments to deliberate on the matter,” said Mr Kiptoo.
The meeting was held after a verification mission on the Ugandan dairy sector, by both Kenyan and Ugandan delegations, from December 16 to 20.
This came after Kenya raised concerns about the excessive influx of milk from Uganda.