Traders who deal with imported shoes can now breathe a sigh of relief after the government scrapped new taxes it had imposed on imported shoes.
The new tax saw traders pay a tax of $1.5 (Sh164.4) per pair of leather shoes and $1 for sports shoes imported into the country, as opposed to the initial taxes of 25 percent per consignment. In the original tax, traders normally paid Ksh2 million per 40-feet container of shoes.
In a letter by Treasury Cabinet Secretary Ukur Yatani to the Kenya Revenue Authority (KRA), Yatani suspended the taxes that had been in operation since July 1.
“After due consideration of the matter, the National Treasury has decided to revoke the specific rates of duty on imported shoes and apply the applicable Common External Tariff rate of 25 percent. In the meantime, KRA should allow importers to pay import taxes, levies, and fees amounting to Sh2 million per 40-feet container up to August 31, 2021,” said Yatani in a letter dated August 16.
The new tax had been agreed upon by EAC Council of Ministers in May in a bid to protect the local shoe industry, but only KRA had implemented it of all the EAC states.
As a result, this made shoes imported through other EAC states cheaper as compared to Kenya, making Kenyan traders lose out to their EAC counterparts.
KRA targets Sh119 billion from import duty in the current financial year, in which it a target of Ksh1.776 trillion in ordinary revenues for the year is set.