Kenyans will have to dig deeper into their pockets to acquire the popular and widely available second-hand clothes as KRA moves to align import duty on mitumba with EAC tariffs.
Profiling and Targeting chief manager Grace Lekasi said the adjustment follows revelations that the Border and Customs Department could be levying lower taxes on mitumba clothes and shoes due to under declaration of weight and an increase of the exchange rate of the Kenyan shilling to the US dollar.
“Data analysed from January 2022 indicates that less than 19 per cent of the declarations comply with the minimum acceptable weights. Consequently, the department could be levying lower taxes in approximately 80 per cent of the declarations,” Lekasi said.
“This may result in a loss of between Sh150,000 and Sh200,000 per 40-feet container,” she added.
As a result, Lekasi said the Customs department has adjusted delivery charges for the products on free on board (FOB) shipment to new tariffs to avert the risk of importers paying lower taxes on the products due to weight under declaration.
Through the Valuation Matrix (BIDM), the department has further fixed the minimum acceptable weight for a 40-feet container of second-grade mitumba at 24,000 kgs.
The previous East African Common External Tariff levy of $0.2 (Sh24.35) per Kg of imported first-grade mitumba clothes has now risen to $0.90 (Sh109.58) and $0.75 (91.31) for second-grade worn clothes.
New charges apply for mitumba shoes whose tax was adjusted from $0.4 (Sh48.70) per kg.
This means that with the shilling currently exchanging 121.75 to the dollar, importers will have to pay Sh91.31 per kg of second-grade mitumba clothes and Sh109.58 for first-grade.
This translates to a total minimum FOB levy of Sh2,191,440 for second-grade mitumba clothes and Sh2,629,920 for first-grade mitumba.
The previous levy of $0.2 per kg of mitumba clothes would have put the total FOB levy on a 40-feet 24,000 kg container of the consignment at Sh584,400.
Lekasi said the new taxes may fluctuate based on the exchange rate and other freight charges.
“The department should adhere to the minimum recommended weights for all categories of used worn articles in assessing taxes,” she said.