VAT law changes fortunes for raw milk hawkers

By HEZRON OCHIEL

Kisumu County: Most consumers in Kisumu are opting for pocket-friendly unprocessed milk, instead of the more expensive processed milk.

The new development is causing jitters and has heightened fears among processed milk sellers who complain that imposition of the Value Added Tax on the product is giving milk hawkers undue advantage.

‘‘The VAT has impacted on sales. The sales have drastically gone down... fewer buyers come to buy the products here,’’ said Alex Achebi, Ukwala Supermarkets supervisor.

But for the hawkers, the introduction of the VAT has been a blessing in disguise as their businesses are booming with more and more customers shunning processed milk.

‘‘Business is good. I have doubled sales after the tax was implemented. Everybody is rushing for my milk,’’ said Francis Maramba, a milk hawker. Currently, a half a litre of unprocessed milk trades at Sh35 compared. This is a good deal for consumers as   the same amount of processed milk sells for anything between Sh55 and Sh60.

Health risks

Kenyan laws prohibit large-scale hawking of milk on health and hygiene grounds.

Health officials allege that milk hawkers add water and chemicals to raw milk sold to customers, exposing them to health risks.

‘‘I am aware that hawkers occasionally add water but still it is pocket-friendly. This is all we can afford,’’ said Lilian Anyango, raw milk consumer.

The Kenya Dairy Processors Association recently petitioned Treasury to reconsider VAT on milk saying the introduction of 16 per cent tax on processed milk has far reaching repercussions on the industry.

Besides milk, products whose prices were affected by the implementation of the VAT law were fertilisers, cooking gas, textbooks, among others.