Kepsa wants taxes on farm inputs reduced

The Kenya Private Sector Alliance (Kepsa) now wants taxes on solar panels, pesticides and power tariffs reduced as one way of cushioning farmers and manufacturers.

The alliance that brings together manufacturers said the continued rise in cost of production was due to rising cost of fuel and electricity.

This comes barely a week after the Senate said the soaring prices of electricity and fuel were forcing manufacturers to close shop and head to neighburing countries.

According to Kepsa, tens of businesses that were affected by Covid-19 were yet to fully recover, despite the government lifting curfew and reopening the economy.

This emerged during a stakeholders' meeting in Naivasha where the issue of double taxation re-emerged, with calls to urgently address the matter before Kenya loses more investors.

Kepsa Chief Executive Officer Carole Kariuki said the number of taxes and licences an investor requires to operate in the country is worrying.

Kariuki added that this had been worsened by levies imposed by county governments, pushing high production costs to the over-taxed investors.

“We are calling on the government to reduce taxes on pesticides and solar so that manufacturers can have alternative sources of energy as electricity is very expensive,” she said.

Kariuki said many manufacturers and farmers had raised their concerns over double taxation by county governments, which they said is affecting inter-county trade.

“It’s becoming nearly impossible for manufacturers and farmers to move their goods from one county to another due to the punitive and high levies imposed,” she said.

Earlier, the Kenya Flower Council (KFC) said floriculture was one of the highest taxed sectors in the country, despite a rise in the number of challenges facing the farmers.

According to the council, flower farmers are currently paying a record 45 different taxes to both the national and county governments every year.

According to council CEO Clement Tulezi, the national and county governments are unfairly targeting flower farmers, despite the losses they are incurring.

He said the over-taxation was affecting their profit margins amid a drop in flower prices in the EU market.

“The government should spread its tax margins to the informal sector instead of unfairly targeting flower farmers due to the misconception that they make millions in profit,” said Tulezi. Nakuru County Assembly has introduced a Flowers Service Charge Bill that seeks to collect one percent of gross sales from the farmers.