The National Treasury has made a U-turn on its plan to increase taxes on imported furniture, measures aimed at growing local industries.
Treasury had last year said it supported a Bill to amend the Excise Duty Act and impose a 30 percent excise tax on imported furniture.
The Bill by Kiambu MP Jude Njomo is expected to promote the local furniture industry.
In its submission to Parliament last October, Treasury had argued that as long as the Bill protected domestic products, it would support it. It has since changed tune, saying import duty charged on furniture entering the country was enough to protect the local operators.
“As Treasury, we use import duty to protect local manufacturers. Already, the imported furniture attracts a duty of 35 per cent,” said Gaichuhie when he appeared before Parliament’s Committee on Finance and National Planning.
Treasury Chief Administrative Secretary (CAS) Nelson Gaichuhie said the State uses import duty to protect local industries and observed that the industry already pays this at a rate of 35 per cent.
The CAS said the excise duty would be stifling regional trade and could see other EAC partner States fight back. He cited a recent instance where Treasury imposed excise on imported glass products but was quashed by the court.