Kenya, Uganda in Fresh Trade Tensions Over Increased Taxes on Kenyan Products

Summary:

• Kenya and Uganda face fresh trade tensions as Uganda increases taxes on Kenyan products, causing disruptions at the border. This move follows previous disputes, including Kenya’s restrictions on Ugandan goods and disagreements over oil imports.

---

Kenya and Uganda are on the brink of renewed trade tensions following Kampala’s decision to raise taxes on Kenyan products by Ksh3 per kilogram.

Kenyan exporters of Irish potatoes to Uganda find themselves stuck at the border, caught off guard by the newly imposed levies.

According to reports from Uganda’s Daily Monitor, the country’s tax authority cited inadequacies in the previous valuation of the product, prompting a reassessment of taxes.

“We have revised and increased the withholding tax on Irish potatoes entering the country,” quoted the Uganda Revenue Authority.

This recent development has led to over 30 Kenyan trucks being stranded at the Busia border customs, while those who crossed without paying the revised duty are being held in Jinja, a town in eastern Uganda.

Haji Ali Mande, president of the Uganda Clearing and Transport Agents Association in Jinja, criticized the swift and substantial implementation of the tax, labeling it as burdensome for importers.

This escalation is anticipated to worsen existing trade tensions, which previously led to Kenya imposing restrictions on certain Ugandan products, notably dairy items.

Such actions run counter to the principles of the East African Community Customs Union, which advocates for free trade among member states.

Last year, Uganda brought a case against Kenya to the East African Court of Justice after Nairobi denied a license to its government-owned oil marketer, the Uganda National Oil Corporation (UNOC), to operate locally and manage fuel imports destined for Kampala.

In November, Kenya declined to grant ONUC a local license for oil marketing, prompting Uganda to take the matter to the regional court last month, seeking Kenya’s endorsement for the operation.

Uganda alleges that Kenya failed to uphold a commitment made in April the previous year to support independent fuel imports from Kampala, slated to begin this month.