TERMS OF REFERENCE FOR THE KAM STUDY ON REVIEW OF THE EAC CET RATES
The Protocol for implementation of the EAC Customs Union came into effect in 2005 with the objectives of:
One of the benefits envisaged in the Customs Union is the increased intra-regional trade through elimination of tariff barriers. However, this has not been the case. There are various anomalies existing in the current EAC CET that need to be addressed holistically once and for all. These are in the form of import duty rates that may not conform to the three band structure of raw materials, intermediate products and finished products. Items that are included in the sensitive list also account for distortions in the CET and need to be reviewed. KAM has in the past tackled the various anomalies through the annual budget process which has seen review of various CET rates for short term periods (e.g. one year) and others for the long term (permanent review such as in the case for paper sector). In some cases, items are set aside as sensitive and thus attract higher duty rates than provided for in the current three band structure of the EAC CET
TERMS OF REFERENCE FOR THE KAM STUDY ON REVIEW OF FISCAL INCENTIVES TO PROMOTE EXPORTS IN THE EAC MARKET
EAC is an important market for Kenya, it takes about 28.4% of Kenya’s total exports and about 60 % of Kenya’s manufactured products. According to 2015 Economic survey, Kenya’s exports to East African Community dropped from Kshs.137.1 billion in 2011 to 134.9 in 2012. Exports value improved marginally in 2013 from Kenya shilling 124.9 to Kshs 125.7 in 2014.
Kenya’s exports to Uganda reduced from Kshs 75.9 billion in 2011 to Kshs 67.4 billion in 2012 and reduced further in 2013 to Kshs 65.3 billion and Kshs 60.7 billion in 2014. Kenya’s exports to Tanzania reduced from Kshs 46 billion in 2012 to Kshs.40.9 billion in 2013 and increased to Kshs.42.7 billion in 2014. Kenya’s export to Rwanda increased from Kshs. 13.5 billion in 2011 to Kshs 16.1 in 2012 and then reduced to Kshs 13.4 billion in 2013 increasing again to Kshs 14.4 billion in 2014 while Kenya’s exports to Burundi reduced from Kshs 5.9 Billion in 2011 to Kshs 5.3 billion in 2012, increased to Kshs 5.3 billion in 2013 and Kshs.7.8 billion in 2014.