Tuesday, June 18, 2024

Finance bill 2024: Cooking oil prices to increase by 80%

By Gloria Rebecca

The Edible Oil Manufacturers Association of Kenya has cautioned lawmakers not to pass the Finance Bill 2024 arguing that it would push up cooking oil prices by 80%.

In a press statement released on Sunday, May 19, the association noted that the bill proposed a 25% Excise Duty on vegetable oils and termed it excessively harsh and severe.

Co-Op post

The manufacturers fear that the bill will allow for taxation on both the finished products and the raw materials.

“If implemented, this Excise Duty will trigger an unprecedented surge in the price of cooking oil, a staple in Kenyan households,” read the statement in part.

NCBA

“The cost of essential commodity is projected to skyrocket by 80%, rendering it unaffordable for millions of Kenyans, particularly low-income earners and small-scale traders commonly known as ‘hustlers’ and mama mbogas.”

The association also said that cooking oil is a key ingredient in the preparation of other products and if the prices go up, it will mean the prices of these other products will also skyrocket.

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For example, the manufacturers projected that bread, which uses cooking oil during the baking process, will increase from ksh70 to ksh80 while a bar of soap will get to ksh270 from khs180.

Margarine, which a common spread in most households is also likely to get to ksh300 from a low of ksh160. Other affected products include mandazi, chapati, and chips.

“Such price hikes will disproportionately affect the most vulnerable members of the society, exacerbating the already high cost of living and plunging millions into deeper financial distress,” added the statement.

“The 25% excise duty threatens to dismantle the government’s own agenda of promoting local value additional in agribusiness and could stymie the growth of local edible oil production.”

The association also pointed out and said if passed, the bill will put over 40,000 jobs at risk which will force to some companies to scale their workforce therefore worsening the unemployment rate in the country.

“Moreover, the edible oils sector is a significant contributor to Kenya’s economy, directly employing approximately 10,000 individuals and indirectly supporting over 30,000 jobs. The proposed tax risks decimating these livelihoods and destabilizing the manufacturing industry at large,” the manufacturers argued.

The association, therefore, wants the government to scrap the excise duty that has been placed on cooking oil since it is likely to result in a humanitarian crisis in the long term.

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