The National Assembly has voted to scrap excise duty on a raft of imported goods, headlined by fully‑assembled electric transformers, in a move MPs say will slash energy costs and unfreeze stalled grid‑connection projects.
The Excise Duty (Amendment) Bill 2025 sailed through its third reading on Wednesday morning and now awaits presidential assent before taking effect. 
The 25 percent levy, introduced last year to nudge manufacturers into local assembly, back‑fired by inflating transformer prices and worsening a nationwide shortage that has left Kenya Power with a backlog of more than 320,000 new‑connection requests.
Industry players warned that the duty also hiked the cost of critical inputs such as specialised printing inks, polished glass and industrial polymers, denting margins across construction and packaging.
Finance Committee chair Kuria Kimani told the House the repeal will “restore price sanity in the power‑distribution chain and give local factories breathing room while they scale up capacity.”
Analysts estimate removing the levy could shave up to KSh 4,000 off the retail price of a standard 100‑kVA pole‑mount transformer and trim overall project costs for rural electrification by as much as 8 percent.
Beyond transformers, the Bill eliminates excise on imported printing ink (except that originating outside the EAC rules‑of‑origin regime), ceramic sanitary‑ware, coal and several classes of polymers, signalling a broader pivot away from punitive import taxes toward targeted production incentives.
Treasury officials hinted that a revised scheme of investment allowances may replace the blanket duty in the June budget.
Power‑sector shares rallied on the news: Kenya Power jumped 5.4 percent in mid‑morning trade while equipment supplier Trans‑Century gained 3.1 percent.
Manufacturers’ lobby KAM welcomed the vote but urged “predictable, multi‑year policy signals” to avoid stop‑go taxation that disrupts capital‑expenditure planning.
Once the Bill is signed into law, the Kenya Revenue Authority will issue implementing regulations, with most exemptions expected to kick in on 1 May.
Importers holding consignments at port will be allowed to re‑compute duty and claim refunds where applicable.
The scrapped taxes mark the latest in a series of pro‑growth tweaks by lawmakers seeking to tame stubbornly high power tariffs and revive industrial output, even as the Treasury juggles revenue pressures and mounting debt‑service obligations.
