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Budget: Why sugar is soon likely to turn more sour

Kenyans are likely to pay more for sugar after the government proposed the introduction of excise duty on imported sugar.

This however excludes the sugar imported or purchased locally by registered pharmaceutical manufacturers for use in the manufacture of pharmaceutical products.

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1kg of sugar is currently retailing at over Ksh. 200 and there are fears the prices are likely to increase in the near future.

Majority of Kenyans are sugar consumers and many were hoping that the commodity will be among those whose prices will nosedive once the budget estimates for Financial Year 2023/2024 are presented.

“Consumption of sugar has been associated with various ailments such as diabetes which has become common in many families,” National Treasury CS Prof. Njuguna Ndung’u submitted to Parliament Thursday.

“To discourage consumption of sugar, I propose to the National Assembly to introduce excise duty on imported sugar at the rate of Ksh 5.0 per kilogram excluding the sugar imported or purchased locally by registered pharmaceutical manufacturers for use in the manufacture of pharmaceutical products.”

As relates to tea, the CS lamented that the tea purchased for local value addition either from the factories or tea auction centres is vatable thus affecting the cash flows of tea exporters.

“In order to encourage local value addition of our tea, I propose to the National Assembly to remove VAT on tea purchased from factories or tea auction centres for value addition and subsequent export,” Prof. Ndung’u said.

According to him, the move will help improve cash flows for tea exporters involved in local value addition.

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