Kenya's Ministry of Trade is calling on Parliament to abolish the 17.5% tax on clinker imports, a move aimed at reversing the severe impact on the domestic steel and cement industries since the tax came into effect in July 2023. The Department of Trade and Industry has sent a formal letter to Congress pointing out that the tax policy has led to a decline in cement production, a sharp decline in exports and a disruption of fair competition in the market.
The tax was initially introduced in the name of boosting local production, but was criticized as a typical case of kidnapping policy by a few interest groups. As a key raw material for cement production, the cost of clinker has increased sharply due to high import taxes, which has plunged most cement plants into the predicament of insufficient local clinker supply and difficult to bear import prices. Trade Cabinet Secretary Lee Kinanju pointed out that the capacity utilization rate of many factories plummeted to 60%, and the national cement output fell by 7.9% last year, equivalent to a loss of 763,500 tons (about 15 million bags of 50 kilograms of cement).
The tax policy has also damaged Kenya's position in the East African Community and the Common Market for Eastern and Southern Africa. Cement exports to key markets such as Uganda and Tanzania plunged nearly 50% last year, while domestic imports rose 16.1%, reflecting the vulnerability of local supply chains. Similar taxes have also affected the steel industry, with rising import costs of raw materials such as billets leading to higher prices of downstream products such as rebar, and a number of rolling mills scaling down and triggering a wave of unemployment.
This policy makes the cost of imported clinker high, objectively favoring a small number of local producers, resulting in unfair market competition. This situation has weakened Kenya's competitiveness in the East African Community and the Common Market for Eastern and Southern Africa, to the detriment of key export sectors. At the same time, Kenya's cement imports increased by 16.1%, reflecting the difficulties faced by domestic supply. The government plans to abolish the tax by June 2026 to restore a level playing field and boost industry performance
, Keenanju stressed. This is in response to the industry's persistent complaints that the policy is biased towards some enterprises and unfair.
浙公网安备33010802003254号