Tanzania’s major glass manufacturer, Kioo Limited, has challenged Kenya’s plan to impose a 35 percent excise duty on glass bottles imported from East African Community (EAC) member states, warning that the move could trigger a fresh regional trade dispute.

In a May 20 letter to the Tanzanian government, the company urged diplomatic intervention to block the measure, arguing that it breaches EAC Customs Union rules on the free movement of goods.

Kenya’s Finance Bill 2026 proposes removing the current exemption for glass bottles imported from EAC member states and subjecting them to a 35 percent levy, except for pharmaceutical packaging.

Kioo said the tax would sharply raise the cost of its products in Kenya, which accounts for about 32 percent of its output.“As Kioo exports substantial volumes of glass bottles to Kenya, the proposed excise duty would materially render them less competitive compared to locally manufactured bottles,” general manager Vineet Verma said in the letter.

The company warned that the levy would increase packaging costs for Kenyan manufacturers and consumers, adding an “estimated burden of $7.7 million (Ksh1 billion) to imports valued at approximately $22 million (Ksh2.9 billion).”Kioo produces about 225,000 metric tonnes of container glass annually, supplying food, beverage and alcohol manufacturers across East and Central Africa.

The dispute revives a long-running trade row. In 2021, the East African Court of Justice blocked Kenya’s attempt to impose a 25 percent excise duty on imported bottles, including those from EAC member states.

Kioo had challenged the measure, arguing that it was discriminatory and incompatible with Kenya’s obligations under the EAC Treaty.

Following that case, Kenya amended its Excise Duty Act through the Finance Act 2021 to exempt bottles imported from EAC countries.

Kioo now warns that the proposed reversal risks reopening the same legal and diplomatic fault lines.

The five-page complaint was sent to Tanzania’s ministries of foreign affairs, finance, and industry, and copied to the Prime Minister’s Office.

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