Kenya - Customs and duties

Most import license controls were dismantled in 1993. In 1997, an ad valorem import duty of 70% was imposed on rice, sugar and milk. Priority items such as raw materials, spare parts, agricultural equipment, and medicines had an import tariff of only 5% in 1999. Most capital goods were imported at a tax rate of 15%. Other goods received specific allocations on the international harmonized system of product classification. The maximum tariff rate was 35%. Imports were also subject to a 16% value-added tax and there were excise-taxes on alcohol and tobacco. There were few export duties. In 1999, Kenya, Uganda, and Tanzania signed the East African Community (EAC) treaty providing for the removal of trade barriers by 2003.

Kenya operates six export processing zones, where manufacturers gain a 10-year corporate tax holiday (25% thereafter), a 10-year withholding tax holiday on dividend remittance, duty and VAT exemption on all imports except motor vehicles, and exemption from most other regulatory schemes. The Manufacturing Under Bond (MUB) program gives similar incentives to companies not located in the export processing zones.