Traders will continue shipping in wheat and rice at a preferential tax lower than a binding standard tariff that guides trade within the East African Community(EAC) bloc.
National Treasury Cabinet Secretary John Mbadi said the EAC Council of Ministers last month granted Kenya’s request for an extension of duty remission to support the stocks produced by local farmers—handing traders a relief from the higher 35 percent common external tariff (CET) for the seven-member bloc.
The extension of the duty remission scheme allows millers to continue importing wheat into the country at a duty of 10 percent.
“Mindful of wheat farmers in Kenya, EAC ministers agreed on duty remission of wheat at a rate of 10 percent, instead of the CET rate of 35 percent, provided the millers who intend to import wheat under the duty remission must first purchase locally produced wheat,” Mr Mbadi said in his 2025 Budget Speech on Thursday.
The EAC CET imposes taxes on imports from outside the EAC partner states of Kenya, Uganda, Tanzania, Rwanda, Burundi and South Sudan.
The government said the preferential 10 percent duty has helped ensure enough stocks of wheat to meet local demand for the grain and also protect farmers from unfair competition from imported stocks.
Kenya relies on imports to meet more than three-quarters of its demand for wheat, which is used in baking food such as bread, chapati, and cakes which form part of daily meals for households.
Production of wheat last year increased to 312,200 tonnes from 309,500 tonnes the year before, but the output was less than the levels in 2022 (368,700 tonnes) and 2021 (349,100 tonnes), according to the Economic Survey 2025.
The locally-produced wheat accounted for 11.89 percent of 2.63 million tonnes of stock last year, with the bulk of the stock imported from outside.
Kenya has also applied to the EAC Council of Ministers to continue importing rice at less than half the EAC CET rate of 75 percent to ensure enough stocks to meet demand.
“To meet the local demand for rice, Kenya was allowed to extend the stay of application on the EAC Common External Tariff, and import rice at the rate of 35 percent or $200 (about Sh26,000) per metric tonne—whichever is higher—instead of the CET rate of 75 percent or $345 (about Sh44,850) per metric tonne,” Mr Mbadi said.
The extension has come after domestic rice production in schemes increased 23.2 percent to 282,152 tonnes last year from 229,064 tonnes the year before. Rice farmers in the Mwea area of Kirinyaga County, the country’s largest production scheme, complained of flooding of the local market with cheap imports, prompting the Agriculture and Food Authority (AFA) to commit to mopping up locally grown rice.
The EAC Council of Ministers has also allowed animal feed manufacturers to continue importing inputs for production of the dairy and chicken feeds duty-free to ease the increase in cost for farmers.
At the same time, tea packaging factories will also ship raw materials at 10 percent duty. This is however higher than the zero duty for factories in Tanzania and Rwanda.
