Non-Tariff Barriers

Complaint

Complaint number

NTB-000-864  

NTB Type

2.3. Issues related to the rules of origin  

Complaint

Discriminatory treatment (Excise duty) of Kenyan manufactured products among others Juices products Kenya reported that the Juices are still charged 13% excise duty.  

Status note

The 42nd SCTIFI noted that as per the new Act by the Republic of Uganda the charges have been removed and hence the NTB resolved.The meeting noted that the Republic of Uganda will provide a copy of the Act for the NTB to be treated as resolved.  

Progress update note

1.Delmonte Pineapple Juice:
Uganda reported that it is difficult to differentiate between pineapple juice manufactured using the locally-acquired concentrate and juice manufactured using concentrate imported under duty remission for exports.
Therefore, Uganda could not accord preferential treatment to Delmonte pineapple Juice.
2. During the JPC held with Kenya,Uganda stated that this provision in the excise Duty Act is global and not specific to juices coming in from Kenya. This provision is under a law which is considered domestic and the country has a sovereign mandate to make provisions related to internal tax.Uganda however promised to undertake stake holder consultation on the excise duty tax and report by June 2019.
3.The Regional Monitoring Committee held on 15th October, 2019 noted that these are two separate NTBs on Juices and Pharmaceuticals and should be treated separately. The NTB on Juice was referred to the Customs Committee for resolution during the SCTIFI meeting on 10th November, 2018.
On Pharmaceuticals: Kenya and Uganda agreed to resolve the NTB bilaterally as it was agreed by Heads of State. The two Partner States agreed to update the EACS on the progress.
During the Regional Monitoring Committee held on 15th October, 2019Uganda informed the meeting that work is ongoing to resolve the NTB and would report back by November, 2019
4.During the Sectoral Committee on Trade that took place on 31st October, 2019 Uganda reported that the two Partner States agreed on how to resolve the NTB on Juice bilaterally and have agreed on the framework for resolution and will consult with the responsible agencies to resolve the NTB as agreed by November, 2019.
5.Uganda to resolve the NTB as committed in the Bilateral meeting and also sensitize its Regulatory Authorities on the implementation of EAC Provisions.
6. During the RMC meeting held on 10 August 2020, Uganda reported that national consultations were ongoing and will report in next meeting.Uganda requested for amendment on this NTB since Kenya also charges excise duty on Ugandan juices as attached in the evidence.
7. During the RMC meeting held on 1 SeptemberThe Republic of Kenya informed the meeting that there is a Court (EACJ) ruling on a similar matter and hence Uganda should implement the ruling of the Court.The Republic of Uganda informed the RMC meeting that due to budget constraints the NTB will be resolved together with the one on Pharmaceuticals by 1st July 2021.The meeting therefore agreed to escalate the NTB to the SCTIFI through the SCoT.
8. During the SCTIFI, held in September 2020, the Republic of Uganda informed that resolving this NTB has a budget implication and hence committed to resolve the NTB by 1st July, 2021.
The Republic of Kenya requested that the Republic of Uganda considers implementing interim measures while awaiting resolution of this NTB.
9.The NTB was forwarded to the Directorate of Tax and Policy in the Ministry of Finance to be resolved in the FY 2022/2023. Uganda to invite Kenya for a midterm review of the Bilateral meetings in November 2021..Kenya requested Uganda to consider an interim measure to treat Kenyan products as Uganda products.
10. On 14 June 2022, the EAC Secretariat reported that Uganda recognizes the Initial Bill under discussion may not address the current NTB raised by Kenya and the Government is taking steps to ensure that bill will address the concern, also in the same spirit, Uganda reviewed the initial bills of Kenya, and noticed also the bills are not addressing the Uganda NTBs. Therefore Uganda would recommend that the issue is forwarded to the SCTIFI to urge the 2 Partner states to ensure that the current bills under discussion in the respective Partner States should address the NTBs as agreed in Bilateral Meetings between the two Partner States in April and December 2021.
11.The Bill has been passed by the Parliament, pending gazettement. the amendment includes a change on local content to mean EAC and removes the discriminative part. During the meeting of the Sectoral Committee on Trade requested the Republic of Uganda to fast-track the process of gazettement. At the 41st SCTIFI meeting the Republic of Uganda observed that Parliament had already passed the bill. The Republic of Kenya requested Uganda that once the bill is assented to, Uganda should fast-track the process of gazettement. The Republic of Uganda provided the new text as it is drafted in the bill to demonstrate that it is not discriminatory on juices transferred from the Republic of Kenya. The text states that “Fruit juice and vegetable juice, except juice made from at least 30% pulp or at least 30% juice by weight or volume of the total composition of the drink from the fruits and vegetables locally grown.”
12. In March 2023, the NTB Unit in the Secretariat reported that the RMC noted that Locally Grown as per the Uganda Law means grown in East Africa. The meeting urged Urganda to fast-track the gazettement of the bill.
The 42nd SCTIFI noted that as per the new Act by the Republic of Uganda the charges have been removed and hence the NTB resolved. The meeting noted that the Republic of Uganda will provide a copy of the Act for the NTB to be treated as resolved.
13. On 10 August 2023 , Kenya requested that Uganda shares the current Act and the implementation of the same in order to resolve the issue as it the matter cannot be resolved based on a bill.
14.The 43rd SCTIFI directed the Republic of Uganda and Republic of Kenya to hold a bilateral meeting to resolve NTB 000 - 864 on discriminatory excise duty on juice by 30th June 2024 and report to the 45th SCTIFI (EAC / SCTIFI / 43 / 2024 / Directive 39). The issue was considered during the JMC that took place in May 2024 and decided as follows: i. Both Partner States should not apply discriminatory taxes, levies and import duties for goods originating from another Partner State. Further, there should be no quotas on goods as per EAC Protocols within EAC Partner States. ii. Government of Uganda, in the interim to notify the border agencies that locally grown products means products locally grown in EAC iii. Both Partner States to sensitise border agencies on EAC Protocols.  

Policy or regulatory NTB

No 

Location

Uganda: URA (Government institution)  

Reporting Country or Region

Kenya  

Country specific trade issue

No  

Date of incident

2017-11-17  

Status

Resolved  

Date of resolution

2024-11-23  

Product Description

Juices

Computer-assisted translation

• English
• Arabic
• French
• Portuguese

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Total value

0  

Date reported

2019-01-14 08:05  

Modified

2024-11-23 13:51