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25 PER CENT IMPORT DUTY DOESN’T WORK OUT ON PAPER FOR KENYA

PaperPUBLISHERS CONDEMN NEW LEVIES ON IMPORTED PAPER

Kenya’s publishers, packagers and other paper converters have condemned the move by treasury to impose a 25 per cent duty on imported paper, arguing that the high prices are likely to cripple an already struggling industry.

The government argues that the move to increase the tariff on imported paper from 10 per cent to 25 per cent was reached as an effort to protect the ailing Pan Paper Mills that collapsed more than five years ago, which is currently under receivership.

Kenya is now the only country in the East African Community to levy a 25 per cent duty on imported paper and paper-based products.

PRICES WILL INCREASE

As local operators in the paper and paperboard sector have pointed out however, the increased import duty will simply result in increased prices in Kenya from flour, food and beverage products to books and papers, whilst further threatening local industries.

According to Treasury Cabinet Secretary, Henry Rotich, the decision was agreed upon between East African Community member states as a temporary measure to breathe new life into the paper manufacturer but has maintained that if the miller lacks capacity to produce enough paper, the government will revert to the previous tariff.

The Kenya Publishers Association (KPA) has criticised the new levies saying that it will lead to an increase in the prices of goods which will force local publishers to print offshore where prices are much friendlier.

“The business of local publishers is coming to a halt. We are likely to see a lot of publishers print offshore to avoid taxes,” said Lawrence Njagi, KPA Chairman.

HARD PRESSED BUSINESSES COULD COLLAPSE

According to Francis Akuka, Director Aura Publishers, the new levies are going to force some local publishers to exit the industry which has been on a sick bed for some time, adding that the government is actually one of the biggest consumers of paper, so this is “shooting itself in the foot”.

“The Publishing industry has been crawling on its knees and adding higher levies is sending a death sentence to an industry that really needs affirmative action to survive. Publishers will now be forced to increase prices, a cost that will be passed on to parents and authors as books will become costly”, Akuka said.

Pan Paper collapsed under debt in 2009 and even after its recent revival, the miller’s production is said to be minimal and it’s still unclear whether the firm will rise to the occasion.

All the local Kenyan businesses involved with packaging, printing and converting are asking for is a level playing field with competitors in Uganda, Tanzania and elsewhere.

Related article:

‘New tax on imported paper will kill packaging industry’, Business Daily, October 22

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