Facing increasing opposition and the threat of expulsion due to a cooking oil scandal, Trade Cabinet Secretary Moses Kuria on Wednesday, June 21 proposed the removal of the 35 percent duty on edible oils.
In a letter to the National Treasury, CS Kuria advised Njuguna Ndung'u, his counterpart, to substitute the existing 35 percent duty with a 10 percent export and investment promotion levy on imported crude oil.
According to Kuria, the 10 per cent levy will spur the local edible oil manufacturing sector and shift the country from overdependence on the importation of crude cooking oil.
With Kenya spending over Ksh102 billion to import edible crude oil, Kuria underlined that his tax reforms will disrupt the local manufacturing sector and improve efficiency, fairness, and effectiveness.
"To support local manufacturing in the edible oils value chain, it is proposed that we remove the 35 per cent duty on crude oil and instead, introduce a 10 per cent Exports and Investment Promotion Levy on imported crude oil.
"This levy, introduced on selected goods which local manufacturing industries have capacity to produce is meant to incentivise investments in local manufacturing," Kuria's letter read in part.
Further, Kuria announced that the new tax reform will create level pricing of cooking oil in the country. As he spearheads the revitalization of the local manufacturing sector, farmers cultivating palm, soya, and sunflower crops are expected to reap significant benefits from selling their raw products.
"The proposed substitution will be effected once the exports and investment promotion levy comes into effect and will also contribute to growth of palm, soya and sunflower farming," Kuria added in his letter.
Speaking to Kenyans.co.ke, financial expert, Nicholas Gachara stated that Kuria was out to clip the wings of oil importers and promote local manufacturing. He, however, opined that Kuria may be attempting to save his face and clear his name from scandals linked to the edible oil sector.
Kuria's Trade Ministry was implicated in a Ksh6 billion scandal, with the government accused of losing Ksh6 billion in illegal tax exemptions granted during the importation of 125,000 metric tonnes of edible oils.
The Kenya National Trade Corporation was also accused of single-sourcing companies to import the oil, package and sell it, instead of importing it directly from foreign manufacturers.
Kuria, however, claimed that the imports were authorised to protect Kenyans against cartels who wanted to hold the government captive.
After the scandal was exposed by the media, Kuria launched verbal attacks on journalists he accused of misrepresenting facts and being coerced to write negative stories.
He threatened to order government agencies to withdraw advertisements with Nation Media Group, sparking an uproar and backlash from media unions and the Ethics and Anti-Corruption Commission (EACC).
EACC argued that Kuria was not mandated to influence tenders and was at fault for threatening state officials undertaking their legal obligations.
The opposition led by the Azimio coalition also piled pressure on Moses Kuria to retract his threats. Nairobi Senator, Edwin Sifuna compounded the issue by tabling a motion to censure Kuria and declare him unfit to hold office.
