Firms raise cost of wood products on tax increase

3 months ago 47

Wednesday July 06 2022


The cost of home and office decor is set to increase as firms start passing on the new tax on imported wooden products. PHOTO | CYRIL NDEGEYA | NMG

The cost of home and office decor is set to increase as firms start passing on the new tax on imported wooden products.

PG Bison Kenya Limited, dealers in interior decorative building materials, says the government has increased duty on raw materials used to make furniture products under the Common Externa Tariff (CET), which applies to goods coming out of the East Africa Community (EAC).

The duty, which took effect at the beginning of this month, has been increased to 35 percent from 25 percent, making the tax charged on the raw material and that of finished products at par.

“We would like to bring to your attention that our prices need to be reviewed upwards with immediate effect due to a government directive in relation to revised import duty tariffs on wood-based raw material,” said PG Bison in a statement.

“The increase to 35 percent puts further additional inflationary pressure onto the end consumer of wood-based construction raw materials that have already been rising rapidly over the last two years,” it added.

All the EAC partner states settled on 35 percent for the CET on fourth band products, which include furniture, dairy and meat products, cereals, cotton and textiles, iron and steel, edible oils and alcoholic beverages.

Other goods under this band are leather products, fresh-cut flowers, fruits, nuts, sugar and confectionery, coffee, tea, spices, head gears, ceramic products and paints, among others.

This means Burundi, Kenya, Rwanda, South Sudan, Uganda and Tanzania will slap importers with higher tariffs on the affected goods. The levy to be imposed on imported finished products from non-member states is expected to stimulate local production and industrialisation.

PG Bison says the price increment, which will also be impacted negatively by the rising cost of fuel and a weakening shilling against the dollar, will be effected on Friday 8, 2022.

The company said the new tax will affect the range of products it imports, which include particleboards, OSB, MDF, plywood and block board.

The tax will come as a major boost to local manufacturers such as Raiply, which makes these products in the country.

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Source : Businessdaily Africa