• Price reduction attributed to implementation of EAC’s common external tariffs

While prices of foodstuffs imported have reportedly increased consumer goods from the region are gradually falling, just two months after the country started implementing the East African Community (EAC) external tariff.

Business Times visited the Mateos commercial trading centre on Wednesday and noted that the prices of cooking oil, concentrate juice, toothpaste, sugar, soap, biscuits and rice have reduced.

However most of these products with reduced prices originate from Uganda as compared to those from EAC partner states including Kenya, Tanzania and Burundi. 

The price of a 20 litre jerry can of Mukwano vegetable cooking oil is now sold at Rwf16,800 from the original price of Rwf 18,500.  A cartoon of Britannia biscuits has gone down to Rwf 8,500 from Rwf 9,500.

"Our suppliers have reduced the prices. We are also selling relatively lower prices to retailers. We are also receiving many goods from the region,” Mavumbi, a trader in general merchandise told Business Times.

She however expressed concern about the piling stock, as sales are still low.

"We have enough stock now but very few people are buying in bulk,” she said.

The price of a 50 kgs bag of Kabuye Sugar is now sold at Rwf 27,000 from Rwf 35,000. Another trader Nkurunziza Patrick also confirmed that prices had gone down.

‘Prices have only reduced on a few products. We are not making any abnormal sales because the reduction is by a small margin,” he said.

Rwanda started implemented the EAC Customs Union since July this year. Under the EAC Customs Union, goods from partner states attract a Common External Tariff (CEF) of 0 percent on raw materials, 10 percent on semi finished and 25 percent on finished products.

"Price reduction is expected on imported goods that comply with the EAC Customs rules of origin. Those who are cut their prices must be selling old stock if goods are from the region,” said Chris Hakiza, the acting Commissioner in charge of Customs, reacting to the price cuts.

"However the new customs management act only affects import duty. It does not affect internal taxes like Value Added Tax (VAT) and excise duty,” he added, explaining that prices of some products may not reduce.

He also observed that prices of goods manufactured outside the region will not change as they will attract the same tax.

"Even if a product is imported from the Community but is originally manufactured from outside, the taxes charged are still the same.”

The implementation of the Customs Union has been in steady progress and is expected to lead to a fully fledged phase in January 2010.

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