Companies are increasing the cost of wood products due to increased taxes
The cost of home and office decorating is expected to rise as businesses begin to pass the new tax on imported wood products.
PG Bison Kenya Limited, a dealer in interior decorative building materials, says the government has increased duties on raw materials used to make furniture products under the Common External Tariff (CET), which applies to goods originating from the East African Community (EAC).
The duty, which came into force at the start of this month, has been increased from 25% to 35%, making the tax collected on the raw material and that of the finished products at par.
“We would like to draw your attention to the fact that our prices are to be revised upwards with immediate effect due to a government directive regarding the revision of import duties on wood-based raw materials,” said PG Bison. in a press release.
“The increase to 35% puts additional inflationary pressure on the end consumer of wood-based construction raw materials which have already grown rapidly over the past two years,” he added.
All EAC Partner States have agreed on 35% for the CET on fourth band products, which include furniture, dairy and meat products, cereals, cotton and textiles, iron and steel, edible oils and alcoholic beverages.
Other goods falling under this category are leather products, fresh cut flowers, fruits, nuts, sugar and confectionery, coffee, tea, spices, headgear, ceramic products and paints , among others.
This means that Burundi, Kenya, Rwanda, South Sudan, Uganda and Tanzania will impose higher tariffs on affected goods from importers. The levy to be imposed on finished products imported from non-member states should stimulate local production and industrialization.
PG Bison indicates that the price increase, which will also be negatively affected by the rising cost of fuel and the weakening of the shilling against the dollar, will be carried out on Friday 8th 2022.
The company said the new tax will affect the range of products it imports, including particleboard, OSB, MDF, plywood and blockboard.
The tax will be a major boost for local manufacturers such as Raiply, which manufactures these products in the country.