It's a mixed bag for farmers despite Finance Bill review

Alice Achieng' Odhiambo tills her farm at Pap Nyadiel, Alego, in Siaya County. [File, Standard]

It is a mixed bag for the agricultural sector after MPs made major amendments to the Finance Bill, 2024.

At a press conference on Tuesday after the Kenya Kwanza Parliamentary Group Meeting, Finance and National Planning Committee Chairman Kuria Kimani announced the significant scrapping of several provisions in the Bill, including a 35 per cent excise duty on packaging materials, which would have affected value-added products such as tea.

“The 16 per cent VAT on bread has been dropped. We are taking steps to reduce the cost of living by making vegetable oil more affordable,” said Mr Kimani. He also assured that the proposed eco-levy would not affect locally manufactured goods, and there would be no increase in mobile money transfer charges. 

The Finance Bill has also imposed excise duty on imported table eggs, onions and potatoes to protect local farmers from an influx of onions from our neighbouring countries. 

Treasury Cabinet Secretary Njuguna Ndung’u last week in his budget address proposed scrapping the excise duty on eggs, potatoes, and onions from the EAC to promote intra-regional trade.

“To promote trade across the East African region, I propose the removal of this excise duty on imported eggs, potatoes, and onions originating from EAC partner states, subject to goods meeting the EAC rules of origin,” Prof Ndung’u said while presenting the 2024-25 budget statement in Parliament.

This removal of the tax was expected to lower prices for these products, benefiting consumers. Kenya, which imports eggs from Uganda and South Africa to stabilise local prices, could see a significant reduction in the cost of this commodity. Currently, a tray of eggs retails between Sh550 and Sh600. The Finance Bill, 2024 has drawn mixed reactions from leaders and the public.

Githunguri MP Gathoni Wamuchomba voiced strong opposition, citing the Bill’s adverse effects on smallholder farmers. Wamuchomba argued that it unfairly targets smallholder farmers while benefiting commercial farmers. She detailed the challenges farmers face and the potential repercussions of the proposed tax policies.

“I represent farmers. I have seen this proposal as discriminatory. You cannot remove some taxes on a certain sector and not touch the other sectors,” she said. Wamuchomba also pointed out the selective nature of the tax benefits, which seem to favour certain crops over others.