The Government has moved to ease the financial burden on the power sector by proposing the removal of the 25 per cent excise duty on imported fully assembled electric transformers and their components.
The Excise Duty (Amendment) Bill, 2025, now before the National Assembly, seeks to reverse a tax measure that industry players say has driven up the cost of manufacturing transformers rather than supporting local assembly.
Kikuyu MP Kimani Ichung’wah, who has sponsored the Bill, argues that the duty—originally introduced under the Tax Laws (Amendment) Bill, 2024—has had unintended consequences, making it more expensive to source essential parts.
The proposal now aims to rectify this by scrapping the tax altogether.
“The principal object of this Bill is to amend the Excise Duty Act to remove excise duty on imported fully assembled electric transformers,” the document states.
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It further acknowledges that the tax, which was meant to encourage domestic assembly, has instead resulted in “increasing the cost of importing parts.”
The Ministry of Energy, together with other stakeholders, believes this policy shift could make transformers more affordable, potentially reducing electricity costs and accelerating power distribution.
The Kenya Power and Lighting Company (KPLC) is expected to benefit from the improved availability of transformers, a crucial component in expanding the national grid.
By lifting the excise duty, the Government hopes to strengthen the energy sector, enhance accessibility to electricity, and support the country’s broader economic growth.
