east african community gazette notice

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Tax AlertEast African Community Gazette Notice30 June 2021

IntroductionOn 30 June 2021, the East African Community (“EAC”) Secretariat published the EAC Gazette Notice No. 14 of 2021 (“the Gazette”). The Gazette highlights changes effected by the Council of Ministers (“the Council”) to the East African Community Customs Management Act, 2004 (“EACCMA”) and the East African Community Common External Tariff (“EAC CET”) with effect from 1 July 2021.

We set out below some of the key changes affecting individual Partner States and the EAC region as a whole:

2 East African Community Gazette NoticePwC Kenya

The Council approved various stays of application of EAC CET duty rates for the next one year on certain items. As is the norm, the metal and allied sector, textile and shoe manufacturers, and timber product manufacturers will continue to enjoy protection from stiff foreign competition. This year, the Council has also increased duty on importation of agricultural products including coffee, tea, frozen meat and chicken, peanut butter, oils and rice in order to cushion local farmers against the adverse effects of cheap agricultural imports. The changes are highlighted in the table below:

Changes Specific to Kenya

Description Decision

Decrease in duty EAC CET Rate Applicable rate for 1 year

Rice in the husk, husked (brown) rice, semi milled or wholly milled rice and broken rice

75% or USD 345/MT 35% or USD 200/MT

Polymers of vinyl acetate or of other vinyl esters, in primary forms; other vinyl polymers in primary forms – Others: Copolymer

10% 0%

Bars - Other, not further worked than hot-rolled, in coils (7225.30.00). 10% 0%

Worn items of clothing, worn items of footwear and other worn articles of HS codes 6309.00.10, 6309.00.20, and 6309.00.90.

35% or USD 0.40/Kg 35% or USD 0.20/Kg

Increase in duty EAC CET Rate Applicable rate for 1 year

Cooked potatoes, fresh or chilled, of tariff codes 0701.90.00, 0710.10.00, 2004.10.00, and 2005.20.00.

25% Assigned as sensitive items - 30%

Other vegetables prepared or preserved of tariff code 2005.59.00. 25% 25% or US$ 400/MT

Sweet corn (Zea mays var. saccharate) and tomatoes, whole or in pieces of tariff codes 2005.80.00 and 2002.10.00 respectively.

25% 25% or US$ 250/MT

Poultry and other meat products of tariff classification 0207.11.00, 0207.12.00, 0207.13.00, and 0207.14.00.


Peanut butter (2008.11.00). 25% 30%

Chocolate and other food preparations containing cocoa of tariff heading 18.06.


Butter and other fats and oils derived from milk and dairy spreads of tariff heading 04.05.


Detergent powder, laundry soaps, bathing bar soaps/toilet soap, and soap noodles.

25% Assigned as sensitive items - 30% or USD 300/MT

Liquid Gas Cylinders (“LPG”) of tariff code 7311.00.00. 0% 25%

Chewing gum (1704.10.00). 25% Assigned as sensitive items - 30%

Other sugar confectionery (sweets) of tariff code 1704.90.00. 25% Assigned as sensitive items - 30%

Sweet biscuits (1905.31.00). 25% Assigned as sensitive items - 30% or USD 525/MT

Tomato sauce (2103.20.00) 25% 25% or US$ 250/MT

Sauces and preparations therefore; mixed condiments and mixed seasonings; mustard flour & meal & prepared mustard (2103.90.00).

25% 25% or US$ 500/MT

Other food preparations of flour, groats, meal, starch (1901.90.90). 25% 25% or US$ 250/MT

Prepared foods obtained by the swelling or roasting of cereals or cereal products (1904.10.00) and other items of tariff code 1904.90.00).

25% 30%

Lubricants in liquid form (2710.19.51) and lubricating greases (2710.19.52). 25% Assigned as sensitive items - 30%





Non-lubricant oils (cutting oils, coolant, anti- rust, brake fluids and similar oils) of tariff number 2710.19.56

10% 25%

Coated electrodes of base metal, for electric arc-welding (8311.10.00). 25% 25% or USD 250 per MT

Safety matches (3605.00.00). 25% 25% or USD 1.35/Kg

Refined soya bean oil, RDB Palm olein, RDB Palm stearine, other palm oil refined, sunflower oil and refined corn oil

25% 25% or USD 500 per MT

Nails, tacks, and drawing pins, corrugated nails staple other than those of heading 83.05 and similar articles of iron or steel, whether or not with heads of other materials.

25% Assigned as sensitive items - 30% or USD 350/MT

Margarine and edible mixtures (1517.90.00). 25% 25% or USD 500/MT

Styrene acrylic (3903.20.00). 0% 10%

Particle board, oriented strand board (OSB) and other items of HS codes 4410.11.000, 4410.12.000, 4410.19.000 and 4410.90.00

25% 25% or 130/MT

Medium Density Fireboard (“MDF”) of HS codes 4411.12.00, 4411.13.00, 4411.14.00, 4411.92.00 44111.93.00 and 4411.94.00

25% 25% or USD 150/MT

Plywood of HS codes 4412.10.00, 4412.31.00, 4412.33.00, 4412.34.00, 4412.39.00

25% 25% or USD 200 per m3

Blockboard, laminboard and battenboard of HS codes 4412.94.00 and others of 4412.99.00

25% 25% or USD 225/MT

Uncoated paper and paper board in rolls or sheets of HS codes 4805.19.00 10% 25%

Skillets, free hinge lid packets (4819.20.10). 10% 25%

Articles of apparel and clothing accessories, knitted or crocheted, and not knitted or crocheted of chapters 61 and 62 respectively (excluding the sensitive items at 50% rate)

25% Assigned as sensitive items – duty rate 30%

Shoes with leather uppers 25% 25% or USD 1.5/Pair

Shoes with uppers of textile materials of HS codes 6405.20.00 and other shoes of HS codes 6405.90.00, 6401.10.00,6401.92.00,6401.99.00,6402.19.00, 6402.20.00, 6402.91.00 and 6402.99.00.

25% 25% or USD 1/Pair

Footwear of HS codes 6403.20.00 and 6403.40.00. 25% 25% or USD 1.5/Pair

Iron and steel products of HS codes 7209.16.00, 7209.17.00, 7209.18.00, 7209.26.00, 7209.27.00, 7209.28.00, 7209.90.00.

10% 10% or USD 125/MT

Various iron and steel products of tariff number 7210.30.00, 7210.61.00 and 7212.30.00.

25% 25% or USD 250/MT

Various iron and steel products of tariff number 7210.41.00 and 7210.70.00. 25% 25% or USD 275MT

Various iron and steel products of tariff number 7211.23.00, 7211.29.00, 7211.90.00, and 7212.20.00.

25%/10% 10% or USD 125/MT

Various iron and steel products of tariff number 7212.40.00 and 7212.50.00. 25% Assigned as sensitive items - 30% or USD 300/MT

Clad 25% 25% or USD 250/MT

U sections, I section, H sections, L or T sections 0% 25% or USD 275/MT

Wire of iron or non alloy steel - not plated or coated, whether or not polished (7217.10.00) and others of HS codes 7222.11.00, 7222.19.00, 7222.20.00, 7222.30.00, and 7222.40.00.

10% 25% or USD 250/MT





Items of tariff number 7225.50.00 (Other, not further worked than cold-rolled (cold-reduced))

10% 10% or USD 125/MT

Items of HS code 7225.91.00 and 7225.92.00. 10% 25% or USD 250/MT

Items of HS code 7225.99.00. 10% 25% or USD 275/MT



Items of HS code 7306.50.00, 7306.61.00, 7306.69.00 and 7306.90.00. 25% 25% or USD 250/MT

Wire of a kind used in the manufacture of tyres (7217.30.10). 0% 25% or USD 275/MT

Bridges and bridge sections, towers and lattice masts, doors, windows and their frames; equipment for scaffolding, shuttering, propping or pitpropping thresholds for doors, road guard rails and other structural steelwork.

25% 25% or USD 250/MT

Coach screws, other wood screws and screw hooks and screw rings and other items of HS codes 7318.11.00, 7318.12.00, 7318.13.00, and 7318.19.00.

10% Assigned as sensitive items – 30% or USD 350/MT

Rivets and other items of HS codes 7318.23.00 and 7318.29.00. 10% Assigned as sensitive items – 30% or USD 350/MT

Leaf-springs and leaves therefore (7320.10.00). 25% 25% or USD 250/MT

Other screws and bolts, whether or not with their nuts or washers and nuts of HS codes 7318.14.00, 7318.15.00 and 7318.16.00.

10%/25% Assigned as sensitive items – 30% or USD 350/MT

Stove, range, grates, cookers (including those with subsidiary boilers for central heating), and similar items of HS codes 7321.19.00 and 7321.89.00.

10% 25%

Articles of iron or steel of HS codes 7323.10.00 and 7326.90.90. 25% 25% or USD 250/MT

Filing cabinets (8304.00.00). 25% 25% or USD 250/MT

Wooden furniture of a kind used in offices, wooden furniture of a kind used in the kitchen, wooden furniture of a kind used in the bedroom, other wooden furniture and other metal furniture.

25% Assigned as sensitive items – 35%

Jams, fruit jellies, marmalades, fruit or nut purée and fruit or nut pastes, obtained by cooking, whether or not containing added sugar or other sweeting matter—other (2007.99.00 and 2007.10.00).

25% 25% or USD 250/MT

Prefabricated buildings of HS code 9406.90.90. 25% Assigned as sensitive items – 30% or USD 350/MT

Ceramic flags and paving, hearth or wall tiles; unglazed ceramic mosaic cubes and the like, whether or not on a backing; finishing ceramics (6907.21.00, 6907.22.00, 6907.23.00, 6907.30.00 and 6907.40.00).

25% Assigned as sensitive items – 30% or USD 1.75 / SQM

Sports footwear, tennis shoes, basketball shoes, gym shoes, training shoes and the like; and ski Boots, cross country ski footwear and snowboard boots.

25% 25% or USD 1 per pair

Travel Goods, bags, suitcases and similar items of HS codes 4202.11.00, 4202.12.00, 4202.19.00, 4202.21.00, 4202.22.00, 4202.29.00, 4202.31.00, 4202.32.00, 4202.39.00, 4202.91.00, 4202.92.00, and 4202.99.00.


Other Sportswear (6403.19.00). 25% 25% or USD 1 per pair

Other footwear covering ankle (6403.51.00). 25% 25% or USD 1.5 per pair

Footwear with outer soles of rubber, plastics, leather or composition leather and uppers of textile materials -Other

25% 25% or USD 1 per pair





Footwear; tennis shoes, basketball shoes, gym shoes, 25% 25% or USD 1.5 per pair

Helicopters and aero planes of headings 8802.11.00, 8802.12.00 and 8802.20.00

0% 25%

Wire of iron or non-alloy, steel-plated or coated with zinc (7217.20.00). 10% 25% or USD 250/MT

Insulated (including enameled or anodized) wire, cable (including co-axial cable) and other insulated electric conductors, whether or not fitted withconnectors; optical fibre cables, made up of individually sheathed fibres, whether or not assembled excluding cables of tariff 854470.


Other switches for a volt not exceeding 1,000 volts (8536.50.00). 10% Assigned as sensitive items – 30%

Lead-acid, of a kind used for starting piston engines (8507.10.00). 25% Assigned as sensitive items – 30%

Other lead-acid accumulators (8507.20.00). 25% Assigned as sensitive items – 30%

Aluminum sufurias, kettles, milk can (7615.10.00). 25% Assigned as sensitive items – 30%

Barbed wire of iron or steel; twisted hoop or single flat wire, barbed or not, and loosely twisted double wire, of a kind used for fencing, of iron or steel (7313.00.00).


Cloth (including endless bands), grill, netting and fencing, of iron or steel wire; expanded metal of iron or steel - plated or coated with zinc (7314.31.00).


Bars and rods, hotrolled, in irregularly wound coils, of stainless steel (7221.00.00).

25% 25% or USD 250/MT


# Item description Applicable duty rates under remission

1 Inputs for the assembly/manufacture of mobile phones

0%

2 Aerosol cans of HS code 7310.29.10 0%

3 Wheat grain of HS codes 1001.99.10 and 1001.99.90

10%

4 Bars and rods of circular cross-section measuring more than 14 mm in diameter of HS code 7213.99.00

0%

5 Inputs and raw materials for use in the manufacture of energy saving stoves.

0%

6 Geobitec Stone Chips, Alu-Zinc Coated Steel Coils, Acrylic co- polymers of HS codes 2517.49.00

0%

7 Seats, parts, recliner mechanism of HS code 9401.90.00

0%

8 Various fabrics of HS codes 5211.39.00, 5211.42.00, 5211.43.00, 5407.42.00, 5408.10.00, 5408.22.00, 5408.24.00, 5801.22.00, 5801.26.00 and 5804.10.00.

10%

9 Copper/brass foils and other items of HS codes 7409.11.00, 7409.19.00, 7410.11.00

0%

Changes Specific to EAC Member States

Duty remission approvalsIn exercise of the powers conferred under Section 140 of EACCMA, the Council has approved remission of duty on the following raw materials and industrial inputs for a period of one year:

granted 0% duty remission on various packaging materials for processed tea, coffee, agricultural seeds, etc.

● Uganda, Tanzania, Rwanda and Burundi have granted duty remissions on varied items to incentivize manufacturers in the footwear and textile industries.

Changes affecting the EAC as a whole Stay of conditions for remission● Motorcycle assemblers: Similarly to previous years, the

Council has stayed the application of conditions contained in Legal Notice no. EAC/39/2013 of 30 June 2013, pertaining to duty remission on the motorcycle assembly industry, for one more year. The Legal Notice of 2013 provides for duty remission for assemblers of Completely Knocked Down (“CKD”) kits who procure/ manufacture the following specified parts within the EAC; main frame, suspension, or a combination of seat and seat frame, mudguard, wheel rim, break gear and exhaust pipe.

Remissions relating to Personal Protective Equipment (“PPE”)● The Council has extended the remission of duty for PPE for

another year. Duty will apply at a rate of 0% on importation of raw materials and inputs for the manufacture of essential medical products and supplies including masks, sanitizers, coveralls, face shields and ventilators. This extension is in appreciation of the fact that countries are yet to overcome the COVID-19 pandemic.

Preferential tariff treatment under COMESA and SADC● The Council has approved a stay of the application of

the EAC CET rates on originating goods imported from the Common Market for Eastern and Southern Africa (“COMESA”) with effect from 1 July 2021 to 30 June 2022. This stay of application has been granted to Burundi, Rwanda, Uganda and Kenya. Further, the Council has approved a similar stay for Tanzania on originating goods imported from the Southern African Development Community (“SADC”) for a similar period.

● The effect of this stay of application is to further extend preferential tariff treatment of goods imported from COMESA and SADC under Section 112 of the EACCMA which had expired on 31 December, 2019 and been extended vide Gazette Notice No. 17 of 2020 dated 15 September 2020 from 1 January 2020 up to 30 June 2021.

ConclusionThis alert highlights the key trends and changes introduced by the Gazette Notice. Kindly reach out to any of our experts below for advice on how the Gazette may impact your specific business affairs.

Changes affecting the other EAC Partner States The EAC member states continue to be keen on boosting manufacturing, textiles, shoe, and the telecommunication sector. Various measures adopted by EAC Partner States last year have been extended for further one year as follows:

● The Council has approved a stay of the CET rates in favour of a duty rate of 0% on various telecommunication equipment imported for use by the telecommunication sector in Rwanda.

● Manufacturers in Uganda and Rwanda will enjoy duty remission of between 0% to 10% on the importation of raw materials and industrial inputs for the manufacture of furniture and textiles.

● Manufacturers in Tanzania and Uganda have been granted 0% duty remission on equipment for polishing and heating gemstones. Further, manufacturers in Tanzania have been


Contacts

Please note that this tax alert does not constitute tax or legal advice. The alert has been prepared using resources and documents immediately available to the preparer and which may not constitute the final documents. No decision should be made on the basis of this alert. Please consult your regular advisor should you require any advice.

For further information on the East African Community Gazette Notice, please contact any of the people below or your usual PwC contact.

Job Kabochi Director [email protected] +254 020 285 5653

Maurice Mwaniki Associate Director [email protected] +254 020 285 5334

Corazon Ongoro Manager [email protected] +254 020 285 5732

David Nyakinyua Senior Associate [email protected] +254 020 285 5763

Ben Kangangi Associate [email protected] +254 020 285 5130


This publication has been prepared as general information on matters of interest only, and does not constitute professional advice. You should not act upon the information contained in this publication without obtaining specific professional advice.

© 2021 PricewaterhouseCoopers Limited. All rights reserved. In this document, “PwC” refers to PricewaterhouseCoopers Limited which is a member firm of PricewaterhouseCoopers International Limited, each member firm of which is a separate legal entity.

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