Customs and Excise Duty Customs duty is charged on imported and some exported goods.

The duties levied on imported goods are separated mainly into import duty, excise duty and suspended duty. In addition VAT is also collected on goods imported and cleared for home consumption. Customs import duty is paid or a bond guarantee executed if goods satisfy all the requirements for entry into Kenya. Customs declaration A customs declaration (Entry) in the prescribed Form (Form C63) is required for clearing both imports and exports. Import Declaration Fee (IDF) is charged at a rate of 2.25% of the value of goods imported from countries outside the East African Community subject to a minimum of KShs 5,000 and is payable on all imports except those declared as post parcels and whose value is below KShs 5,000. Imports originating from Uganda and Tanzania do not attract IDF. Simba system KRA, in an attempt to modernize customs operations, introduced the simba system in 2005. Under the simba system, customs authorities require one to be registered as a clearing agent in order to lodge documents electronically. Tariff classification Goods are classified under the Harmonized System Convention (HSC) that forms the basis for tariff classification of goods traded in the international market as listed in Annex 1 to the Protocol on the Establishment of the East African Community Customs Union. Customs duty rates Duties are charged at varying rates as published by the Council of Ministers under the common external tariff. The bases of charge of duties are ad valorem (on price value of the good so declared) and specific units (on quantity, weight, number or measurement). The customs duty rates range from 0 to 25%. Reduced customs duty rates are applicable on some imports from countries in the COMESA region, while “Sensitive” imports attract duty above 25% as prescribed by the Council of Ministers. With effect from 1 January 2005, the East African Community Partner States (Kenya, Uganda and Tanzania) agreed to charge import duties as follows: Common external tariff (CET) on goods coming into the EAC from third party states. The applicable three-band Common External Tariff rates are as follows: Category Rate (%) Raw materials 0 Intermediate goods 10 Finished goods 25 However, sugar, wheat and milk and a few other products are categorized as “sensitive” and attract surcharges above the 25% maximum, while all goods entered for home use from Export Processing Zone (EPZ) enterprises attract additional duty as follows: • 2½% of the value of sales, or • 5% of specific rate specified in the Annex I to the EAC

free of duty. The Partner States agreed on a transitional provision to eliminate the internal tariffs under the principle of asymmetry: that with effect from 1 January 2006 the Kenyan exports to Uganda and Tanzania would attract duty at reducing rates as follows: Year Uganda Tanzania Duty rate (%) Duty rate (%)* 1 10 25 2 8 20 3 6 15 4 4 10 5 2 5 6 0 0 * Maximum rates for the year. Examples of exempt items include protective apparel. mosquito nets. seeds for sowing. and raw materials for medicaments among others. speed governors. The Customs Union’s objective is to ensure that the member states do not pay import duty on goods produced from within the region. The value is generally based on the price actually paid or payable for the goods when sold for export to the country of importation. no member state is required to pay duty on goods produced from within the region as long as they possess a certificate of origin. Effective 1 January 2010. The Customs Union will culminate into Common Market effective 1 July 2010 where labour and capital goods will move freely within the region. Temporary residence importers who change their residence to a place outside Kenya within 90 days of their arrival are required to re-export their household goods within the 30 days from the date of change of his residence to a place outside Kenya. .Customs Union Protocol: Common External Tariff. Bona fide household goods may be imported. provided that the importer changes his or her residence from a place outside Kenya to a place within Kenya on a permanent or temporary basis. it is payable within five (5) days from the date of acceptance. These include goods liable to free duty and goods imported by or on behalf of public bodies. otherwise duty becomes payable from the date of importation. Where entry has been checked and accepted. Dutiable value The value of imported goods is determined in accordance with the Agreements on Customs Valuation (ACV) that Kenya adopted in January 2000. Duty exemptions Goods that are exempt from duty are listed in the Fifth Schedule to the East African Customs Management Act. Payment of customs duty The import duty is payable to the Commissioner of Customs Services Department. privileged persons and institutions.

Value for excise duty The rate of excise duty applicable on locally manufactured excisable goods is the ex-factory selling price of the product. Privileged persons or institutions are entitled to refund of certain duties. Goods liable to excise duty include wines and spirits. The level and type of duty imposed on a product are subject to the following criteria: • Value of the goods (customs value). Excise tax and levies on the Line Fill is deferred until a company ceases operation or winds up business or where Kenya Pipeline Company Limited notifies the Commissioner that a petroleum company intends to withdraw from participation. in cases where duty has been paid in error or in case of bad debts that are 3 to 5 years old. soft drinks and cigarettes among others. • Volume or quantity of the goods. Refund claims must be presented within one year from the date of payment of that duty. subject to conditions determined by the Commissioner. Excisable value of imported goods is the sum of the value of goods ascertained for the purposes of import duty and the amount of import duty. Excise duty Excise duty is imposed on specified goods and services whether imported or locally manufactured. and • Tariff classification of the goods (tariff heading) Duty remission and refund Duty is refundable on imported merchandise that is subsequently exported. Taxes and levies on petroleum oils are due and payable at the time of importation for the final product or at the time of release by customs from the Kenya Petroleum Refineries Limited in case of crude oil.Anti-dumping and countervailing duty Anti-dumping and countervailing duties are levied on goods considered to be dumped in Kenya or on subsidized imported goods respectively. Duty may also be remitted if goods are destroyed or damaged while under customs control or during voyage or goods are returned unused to the seller. beer. kilogram. bottled water. is due by the 20th day of the month following the month in which goods and services are supplied by the producer while duty on imported goods is payable within five days after entry has been checked and accepted. . Anti-dumping and countervailing duties are either levied on ad valorem basis (percentage of the value of the goods) or as a specific duty (percentage per unit. and the rate imposed would depend on the result of the investigations. These goods are the subject of investigations into pricing and export incentives in the country of origin. Excisable services include mobile and wireless phone services and casino. payable to the Commissioner of Domestic Taxes on local supplies. suspended duty and dumping duty if any. litre etc). Payment of excise duty Excise duty.

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