Proposed Excise Duty in Finance Bill 2024 Threatens to Upend Cooking Oil Market in Kenya
The Kenyan consumer staples market faces a potential upheaval as the Edible Oil Manufacturers Association (EOMA) raises concerns regarding the proposed Finance Bill 2024 on Cooking Oil Prices.
Imagine walking into your local market to buy a bottle of cooking oil, only to find that its price has nearly doubled overnight. This alarming scenario may soon become a reality for millions of Kenyans if the proposed Finance Bill 2024 is passed.
The Edible Oil Manufacturers Association of Kenya has issued a stark warning: the bill’s provisions could lead to an 80% increase in cooking oil prices, placing an essential household staple beyond the reach of many.
The proposed Finance Bill 2024 includes a controversial 25% excise duty on vegetable oils, a move that manufacturers are calling draconian. According to a press statement released on May 19, this tax would not only affect the finished products but also the raw materials used in their production.
“If implemented, this excise duty will trigger an unprecedented surge in the price of cooking oil, a staple in Kenyan households,” the statement cautioned.
A Dire Impact on Kenyan Households
Cooking oil is not just a kitchen necessity; it’s integral to the preparation of numerous other products. The manufacturers project that bread, a staple food, will see its price increase from Ksh70 to Ksh80, while a bar of soap could jump from Ksh180 to Ksh270.
Margarine, often used in cooking and baking, might soar from Ksh160 to Ksh300. Other everyday items like mandazis, chapatis, and chips would also become significantly more expensive.
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These Finance Bill 2024 on Cooking Oil Prices hikes would hit low-income earners and small-scale traders the hardest, exacerbating the already high cost of living. The association emphasized that such an increase would disproportionately affect the most vulnerable members of society, plunging millions into deeper financial distress.
Economic Consequences Beyond the Household
The implications of this proposed tax extend beyond household budgets. The 25% excise duty threatens to dismantle the government’s agenda of promoting local value addition in agribusiness, potentially stymieing the growth of the local edible oil production sector.
Furthermore, the association warns that over 40,000 jobs are at risk if the bill is passed. This includes direct employment for approximately 10,000 individuals and indirect support for over 30,000 jobs within the industry.
The edible oils sector is a significant contributor to Kenya’s economy. A drastic price increase could decimate livelihoods and destabilize the manufacturing industry at large, leading to broader economic repercussions.
In light of these severe potential impacts, the Edible Oil Manufacturers Association of Kenya is urging lawmakers to reconsider the proposed excise duty. They argue that this tax could result in a humanitarian crisis, with widespread financial strain on Kenyan households and a destabilized economy.
As the debate over the Finance Bill 2024 on Cooking Oil Prices continues, it’s crucial for policymakers to weigh the far-reaching consequences of their decisions. The future affordability of essential commodities and the economic stability of thousands of Kenyans hang in the balance.
Further Discussion and Public Input Needed
The ramifications of the proposed Finance Bill 2024 extend beyond the edible oil sector. We encourage our readers to engage with this critical issue.
Would an 80% increase in cooking oil prices be manageable for Kenyan households? What alternative solutions could ensure both government revenue generation and industry sustainability? Do you believe the potential benefits of increased tax revenue outweigh the projected hardships for consumers and manufacturers? Share your opinions and join the conversation.
