Farmers cry foul over increase in export, import taxes

Workers at Maridadi flower farm in Naivasha prepare roses for export, on February 10, 2025. Farmers have complained over high freight charges. [Antony Gitonga, Standard]

The Kenya Flower Council (KFC) has termed the move by the Kenya Airports Authority (KAA) to increase export and import taxes by 25 per cent a threat to the country’s horticulture sector.

The Council said the Sh110 billion that the sector earned in 2024 could drop sharply due to the new taxes and force farmers to send home hundreds of workers.

In January 2025, the KAA increased export and import tax targeting agricultural produce.

Currently, farmers in the horticulture sector are shouldering the burden high freight charges which doubled in 2024 while the availability of cargo planes remains a challenge.

The Council CEO Clement Tulezi, warned that the country’s flower exports could drop in the coming days following the move by KAA.

He regretted that the sector was already overburdened by taxes from the national and county governments adversely affecting farmers’ profit margins.

“The Kenya Airports Authority has increased export and import taxes by 25 per cent and this will definitely have a negative impact on this sector,” he said.

Tulezi said that the council held a meeting with the KAA over plans to increase taxes.

“Currently we are paying 52 different taxes to the two levels of government despite the economic impact we have in the country by earning Sh110 billion through exports,” he said.

He noted that the freight charges had increased from USD2.1 to USD4.3 in the last year leading to a drop in profit margin for the farmers.

“The Kenya Plant Health Inspectorate Service (Kephis) is also in the process of introducing new taxes targeting imports and this does not augur well for the horticulture sector,” he said.

Speaking on Tuesday, Tulezi said that the prices in the EU market had remained stable for the last couple of years even as consumers continue to introduce new stringent measures.

“Since Covid-19 struck, we have had challenges with the availability of cargo freights, a move which has seen the prices double in the last year,” he said.

Speaking earlier, Redland Roses CEO Disha Copreaux noted that small-scale farmers were the most affected by new taxes and stringent standards imposed in the sector.

Despite the challenges, she said that the sector that has employed more than 200,000 and has the capacity to grow and double production with the support of the State.

“There is a new pest that has affected production and exports to the EU and these plus rising taxes and unpaid VAT refunds have a negative impact on the farmers,” she said.