A major shift in the way tax on imported tiles is calculated is causing deep concern among Kenya’s property developers.
Previously, tax on imported finishing materials, including ceramic tiles, was calculated on total surface area. Under the new formula, however, it will be assessed on total material weight. This has been done, ostensibly, to combat misdeclaration, as weight can be more easily checked than surface area.
Under the new rules, taxation on, for example, 10,000 square (sq) metres of porcelain tiles will now be higher than on 10,000 sq metres of lower density tiles. This is because porcelain is significantly heavier, with standard ceramic weighing typically 15-18kg per square metre, and the same area of porcelain weighing around 20-25kg.
The East African Community, which has its own trade frameworks, will protect imports from neighbouring countries from any aggressive new taxation. However, tiles from outside the East African Community (EAC) will be affected by this amendment to the 2026 Finance Act.
The Kenya Property Developers Association have expressed concern about the lack of consultation with industry leaders, and the ease with which this drastic change was passed through the legislature. It remains to be seen how the industry will adapt, but there is widespread concern that it will increase costs significantly, and lead to major changes in which materials are used and from where they are sourced.
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