Removal of tax on eggs, onions, and potatoes set to lower prices

The government has proposed to scrap excise duty on imported eggs, onions and potatoes in a move expected to reduce food prices and calm trade tensions with neighbouring countries.

Through the Finance Bill, 2025, the National Treasury has recommended the removal of the 25% duty that has been levied on these popular food items.

The change is expected to bring down the cost of food and offer some relief to households struggling with high prices.

It also marks a shift from the 2023 Finance Act, which introduced the tax and caused an outcry from both local consumers and regional trade partners.

"Part 1 of the First Schedule to the Excise Duty Act is amended by deleting the following tariff descriptions and their corresponding rates of excise duty appearing immediately after the tariff description," the Finance Bill, 2025 reads in part.

The tax had made these products more expensive in the local market, while also leading to tension between Kenya and key trade partners, especially Uganda, Tanzania, and Egypt.

The countries hit back with taxes of their own, targeting goods exported from Kenya.

By removing the duty, the Treasury is hoping to make food more affordable and resolve ongoing trade disagreements.

However, the proposal could bring new challenges for local farmers, who may face increased competition from cheaper imports.

A kilo of potatoes was selling at an average price of Sh126.48 in March this year, a rise from Sh107.98 two years ago.

This increase has been blamed partly on the excise tax and on supply problems. With the tax gone, prices may ease, and consumers could start to feel some relief at the market.

Tanzania remains a major supplier of onions in Kenya, while Uganda continues to export eggs to the country in large numbers. Kenya also buys a large share of its potatoes from Zambia and Egypt.

The Treasury has further proposed to remove duty on potato crisps and chips as part of the same reforms.

The issue of food-related trade has created tensions between Kenya and its neighbours.

Uganda and Tanzania, for example, introduced their own taxes on Kenyan products after the 2023 tax changes.

Tanzania has also imposed strict checks on Kenyan goods, causing further delays and frustrations for traders.

In some cases, the disputes have forced heads of state and government ministers to intervene.

Currently, Tanzania charges duty on Kenyan eggs, milk, and sausages, while Uganda taxes potatoes from Kenya.

Treasury officials had earlier assured their counterparts in the East African region that the taxes would be lifted to support trade.

The promise was made during a meeting last year and included in talks between finance ministers in the region.

Former Treasury Cabinet Secretary Njuguna Ndung’u confirmed the commitment, saying it was part of efforts to improve trade ties and ease regional trade challenges.

The proposed changes are expected to help bring down the cost of food, support cross-border trade, and address some of the long-standing disagreements that have affected regional cooperation.