President William Ruto has signed into law the Excise Duty (Amendment) Bill, 2025.
The new law amends the Excise Duty Act, CAP 472, to remove the 25pc duty on imported fully assembled electric transformers and their parts.
The removal of the tax is expected to lower electricity connection costs for consumers by reducing the price of transformers, as every connection relies on transformer infrastructure.
It will also help bring down electricity tariffs by cutting transformer replacement costs.
Additionally, it will enable the Kenya Power and Lighting Company (KPLC) to procure adequate transformers within its current budget, supporting a consistent power supply and minimising disruptions.
The 25% excise duty was initially introduced under the Tax Laws (Amendment) Act, 2024, with the intention of promoting local assembly of transformers.
However, the tax inadvertently increased the cost of importing essential parts, thereby raising manufacturing expenses and hindering the supply of transformers leading to higher electricity connection costs for consumers.