Bread To Cost Ksh.80 If Proposed Excise Duty On Cooking Oil Passes, Manufacturers Warn

Local edible oil manufacturers have warned that the proposed 25% excise duty on vegetable oils in the 2024 Finance Bill will increase the price of cooking oil by 80%.

In a statement issued on Sunday, the manufacturers stated that the duty, which targets raw materials and refined cooking oils, will make the commodity prohibitively expensive for millions of Kenyans.

They warned that it would have a knock-on effect on the price of staple foods like bread. If the bill passes, the cost of a 400-gram loaf of bread will rise from Ksh.70 to Ksh.80, for example.

"The proposed excise duty will also lead to sudden price increases for other essential household products whose raw materials are from vegetable oils like soaps, with the price of long bar soap increasing from the current Ksh.180 to Ksh.270 and margarine (250g) from Ksh.160 to Ksh.300," they said in a statement on Sunday.

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The manufacturers want the 25% excise duty tax on vegetable oils eliminated, claiming it will stifle local edible oil production.

They argued that it contradicted the government's policy of promoting local value addition in agribusiness in the country.

Molo MP Kimani Kuria, who also chairs the National Assembly Finance Committee, sponsors the 2024 Finance Bill.

It proposes new levies, such as a motor vehicle circulation tax, VAT on bread, and higher excise taxes on spirits, cigarettes, M-Pesa, airtime, and bank transfers.

It seeks to amend the Income Tax Act (Cap.470), the Value Added Tax Act (Cap.476), the Excise Duty Act (Cap. 472), the Tax Procedures Act (Cap. 469B), and the Miscellaneous Fees and Levies Act (Cap.469C).