The government of Kenya has announced the exemption of nuts and oil crops produce and products imported by Export Processing Zones (EPZ) and Special Economic Zones (SEZ) based enterprises and originating from the customs territory (East Africa Community partner states).
In a statement, the Agriculture and Food Authority said the exemption is in line with the Special Economic Zones Act and the Export Processing Zones Act.
The exemption will apply to products and produce from EAC partner states, namely the Democratic Republic of Congo, Burundi, Rwanda, Somalia, South Sudan, Uganda, and Tanzania.
In the statement, the Agriculture and Food Authority noted that companies in these special zones will no longer pay import tax on nuts and oil crops brought in from countries within the East African Community (EAC).
The move follows the amendment of the Crops (Nuts and Oil Crops) Regulations 2020 on February 14, to align with Sections 101 and 102 of the Finance Act 2023.
Consequently, starting April 17, 2025, companies in these special zones will no longer pay import tax on nuts and oil crops brought in from countries within the East African Community (EAC).
“The amendment exempts nuts and oil crops produce and products imported by Export Processing Zones (EPZ) and Special Economic Zones (SEZ) based enterprises and originating from the customs territory (East Africa Community partner states),
“As defined in the Special Economic Zones Act and the Export Processing Zones Act, from paying the import levy,” the statement read in part.
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What this Means for Businesses in Kenya
This means that oil crops and nut products from neighboring countries like Uganda, Tanzania, Rwanda, South Sudan, Burundi, DRC, and Somalia can now enter Kenya’s EPZ and SEZ hubs tax-free.
However, the notice explained that businesses must still follow other guidelines and register through KenTrade’s TFP portal.
Additionally, the exemption does not apply to all companies.
“In reference to Section 32(2) of the Crops Act, 2013, this exemption will take effect from 17th April 2025. The Authority will provide guidance on implementation of this change on the KenTrade TFP portal before the effective date,” the authority announced.
“We urge all stakeholders to take note of these changes. For further clarification, please contact the Authority,’ explained the notice.”
Also Read: What Kenya’s New Double Taxation Agreement with Singapore Means
Tax Agreement with Singapore
On 23 September 2024, the Governments of Kenya and Singapore signed a new Agreement for the Elimination of Double Taxation with respect to Taxes on Income and the Prevention of Tax Evasion and Avoidance (the DTA).
The DTA was meant to replace a previous agreement signed on 12 June 2018, which was never enforced.
Moreover, the earlier double taxation agreement was signed on the same day as the Bilateral Investment Treaty between the two nations.
The DTA and the Bilateral Investment Treaty are expected to accelerate the bilateral trade between the countries, which exceeded USD 180 million in the year 2023.
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