Players in the agriculture pest control sector have called on the government to repeal 16 percent Value Added Tax (VAT) as a way of safeguarding common mwananchi and ensuring food security.
Speaking to the Press on Monday in a Nairobi hotel, the East African farmers’ Association Chief Executive Officer, Stephen Muchiri said that 16 percent VAT tax would have a negative impact on pest control products.
We are demanding that the government repeals the tax amendment act which imposes 16% VAT on pest control products. Failure to do this, we will witness our farmers moving to the neighbouring countries to buy the products where they are cheaper and eventually it will hurt our business, he said.
As stakeholders, we are concerned on the negative effects that the introduction of the 16% VAT will have to the agriculture sector as a whole, he added.
In the last three seasons, farmers have faced severe drought, fall armyworm invasion, prolonged floods, influx of cheap food imports that depressed local prices. All these have rendered the Kenyan farmers uncompetitive, he added.
According to Muchiri, the new VAT on pest control products, compounded with the expected increase in fuel, would increase the cost of production in the agricultural sector.
The CEO Agrochemical Associations of Kenya, Evelyn Lusenaka said the tax increase shall result in more than 50% increase in cost of production for Kenyan farmers, increase food prices for the local mwananchi and raise dependency on food imports.
Luseneka noted that the move would also result in increased counterfeit pesticides in the market, food safety and health concerns due to exposure to substandard pesticides, loss on income and livelihoods for small scale farmers and depressed revenue from export markets hence loss of foreign exchange.
She noted that reducing VAT was the only way of helping the state in achieving the big4 agenda on food security.
The CEO fresh produce consortium of Kenya, Okisegere Ojepat also warned on the effects of increasing VAT.
The gains achieved in the agricultural sector are going to be killed by this move to further tax the Kenyan farmers, he said.
He added the stakeholders are calling on government to remove the 16% VAT on pesticides and urgently engage the stakeholders to find the best way forward.
Source: Kenya News Agency