Finance Bill 2024 Proposes 80% Increase in Cooking Oil Prices, Manufacturers Lament

May 21, 2024

The Edible Oil Manufacturers Association of Kenya has opposed the new proposed tax measures contained in the 2024 Finance Bill, arguing they will have to increase cooking oil prices by 80 percent.

The Bill seeks to impose a 25 percent excise duty on vegetable oils, which the association describes as a “potential humanitarian crisis that Kenya cannot afford.”

In a statement released on Sunday, the manufacturers said the duty, which targets both raw materials and refined cooking oils, will make the commodity too costly and out of reach for the majority of Kenyans.

“If implemented, this excise duty will trigger an unprecedented surge in the price of cooking oil, a staple in Kenyan households. The cost of this essential commodity is projected to skyrocket by 80%, rendering it unaffordable for millions of Kenyans,” the statement read. “

The increase is expected to trigger a chain reaction, significantly raising the prices of other essential goods.

“The excise duty will cause a cascading effect on these items, inflating the price of a standard loaf of bread (400g) from Kes 70 to Kes 80. The price of a long bar soap could escalate from Kes 180 to Kes 270, and margarine (250g) from Kess 160 to a staggering Kes 300,” the association stated.

According to officials, the bill is also predicted to have far-reaching effects, potentially leaving many Kenyans unemployed if implemented.

“Moreover, the edible oils sector is a significant contributor to Kenya’s economy, directly employing approximately 10,000 individuals and indirectly supporting over 30,000 jobs. The proposed tax risks decimating these livelihoods and destabilizing the manufacturing industry at large,” the statement continued.

Further, the association believes that the 25 percent excise duty tax on vegetable oils will hinder the local manufacturing of edible oils and wants it removed. They argue it goes against the national agricultural policy to support local value addition.

The contentious 2024 Finance bill is in the Public Participation stage with the deadline set for Tuesday, May 28 before it is approved by Parliament and assented into law in June.

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