Kenya Manufacturers Association (KAM) has warned the 20 per cent excise tax on sweets and chocolates will cause loss of jobs and revenue.
The KAM said retail prices will rise and create an avenue for illicit trade in imports to thrive.
“The government should have imposed excise tax on imported confectioneries at the specific rate of Sh20 per kilogramme for sweets and Sh200 per kilogramme for chocolate in line with the motto, ‘Buy Kenya Build Kenya’. But the new tax makes Kenyan-made sweets and chocolates more expensive than imported ones,” said the statement.
The move also risks halting expansion by local confectioneries worth Sh10 billion, poised to create 700 jobs rising to Sh56.6 billion and 4,530 by 2022.
“The nine main confectionery manufacturers in Kenya directly employ 3,479 people and 16,000 indirectly who have families to take care of. But this new tax threatens their livelihoods as the companies might be forced to reduce staff as part of cost cutting measures to remain afloat,” it said.