Tax Question What is the import tax rate for drilling machines?
Thank you, to determine the tax payable for your drilling Machine, import duty will calculated where import duty= C+I+F where c= cost of the drills, I= insurance and F=freight. However, for air freight cargo, value is based on only the cost and insurance (C&I) of the goods. It excludes the cost of freight.
Determination of the tax payable using the tax rates is as defined in the customs tariffs contained in the CET (Common External Tariff).
The CET stipulates three tax bands (rates) of: (i) 0% for raw materials.
(ii) 10% for intermediate goods or semi processed goods.
(iii) 25% for finished goods originating outside the EAC (East African Community).
However, if the drilling machines are going to be Supplied as specialized vehicles, plant and machinery, feasibility studies, engineering designs and consultancy services and civil works related to Hydro electric power, roads and bridges construction, public water works, agriculture, education and health sectors, they are going to be exempted from tax under the VAT act.