This archive report was first published on 1 July 2019.
Published on July 1, 2019, the government's decision to reduce duties on inputs in the wood-based furniture manufacturing industry marked a significant turning point for the sector.
The 2018 budget had initially set the industry on a downward trajectory by imposing a 35% tax on intermediate wood-based panels, placing them on the same duty band as imported finished furniture.
However, thanks to representations by the Kenya Association of Manufacturers (KAM), the government corrected this distortion in December 2018. KAM's CEO, Phyllis Wakiaga, and Chairman, Sachen Gudka, led constructive engagements with relevant ministries, resulting in a reduction of duties on inputs.
This move has set the foundations to incentivize value addition in Kenya, with KAM thanking the government for being responsive and taking quick action.
According to Sachen Gudka, Chairman of KAM, the furniture sector should be given priority status by the government. He emphasized that furniture manufacturing answers to two pillars under the Big Four agenda: manufacturing and the Affordable Housing Programme (AHP). It has great potential to increase employment and offers forward sub-contracting linkages to the SME sector.
Gudka further stated, “In order for the benefits to accrue to this sector, the Government should ensure that it creates an enabling environment, by helping to reduce the cost of furniture inputs, promoting the competitiveness of locally made furniture, refraining from issuing developers with duty and tax exemptions on locally produced goods. The supply of joinery and cabinets to the AHP should be allocated solely to local manufacturers that add value in Kenya”.
