The Kenya National Chamber of Commerce and Industry (KNCCI) and the Cereal Growers Association (CGA) have expressed deep concern over newly imposed levy on imports and exports of food crops.
Agriculture and Food Authority (AFA) imposed 0.3%levy on all imports and exports of all food crops produce to or from Kenya.
In a response to the announcement, KNCCI and CGA have termed the imposition as a threat to the agriculture sector which accounts for 21.8% of the country’s gross domestic product (GDP).
According to the two bodies, the 0.3% levy imposed on the exports of cereals, legumes, and root tubers will negate the gains made in promoting agricultural exports in the country and subsequently make the sector less productive.
“The agriculture sector is a cornerstone of Kenya’s economy, accounting for 21%of GDP and the second highest wage employer in the private sector. The imposition of this levy threatens to reverse the gains made in promoting agricultural exports, making our produce less competitive in the international market,” read part of the statement.
KNCCI warns of impacts of new taxes
In addition, the authorities considered the levy as inopportune noting that the for the past four years cereal exports from the country have been on a downward trajectory.
“Introducing an export levy right now would stifle this nascent recovery, undermining the efforts of our farmers and exports to regain lost ground,” the statement read.
Likewise, the regulators have asked the government to allow the cereal export sector to stabilize and grow without additional financial burden.
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Furthermore, the two entities have sought clarification from the government, as to whether the levy applies to imports from member countries of the East African Community (EAC) and the Common Market for Eastern and Southern Africa (COMESA).
According to them, the levies would hinder the benefits of regional trade agreements.
“We seek immediate clarification on the introduced levy. It is imperative to understand whether these levies apply to imports from member countries of EAC and COMESA,” the statement read.
Consequently, they assured that they remain committed to advocate for policies that support the growth and sustainability of Kenya’s Agricultural society.
Govt Imposes Levies on Food Crops
The statement came barely two days after the AFA released a statement announcing that the new taxes on all food crop importers and exporters will be imposed effective July 1, 2024, as provided for in the regulation 37 sub regulations (1) to (8) of The Crops (Food Crops) Regulations, 2019.
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“The Authority through the Food Crops Directorate hereby notifies all food crops importers and exporters that starting 1″ July 2024, the imposition of levies will commence as provided for in regulation 37 sub regulations (1) to (8) of The Crops (Food Crops) Regulations, 2019,” read part of the notice.
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