VAT on pesticides threatens meals protection

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True to its supposed objective of rationalizing legal tax guidelines to optimize on revenue and reduce materials beneath the 0-rated class, the Act has introduced some reasonable and progressive measures, which include exemption from VAT for transfers of commercial enterprise as a going situation, items furnished for emergency and household items imported by way of passengers arriving in Kenya from overseas destinations.

One provision that stands is the imposition of VAT on agricultural pest management merchandise and requiring the approval of the Agriculture Cabinet Secretary for 0-rating of inputs used inside the manufacture of pest manipulate products.

Being a predominantly agricultural nation, the outcomes of this choice are a long way-attaining on the problem of meals safety, which is one of the government’s Big 4 agenda. By its very nature, VAT is tax impartial on the delivery chain, and its weight is usually borne utilizing the very last consumer, in this situation, the farmer.

The excessive value of inputs will push up the value of the last produce, forcing the farmer to increase their food expenses to make reasonable margins.

If whatever, some farmers won’t come up with the money for the charges of those inputs and can choose out of agricultural sports altogether, main too much less acreage beneath meals manufacturing.

Similarly, requiring the approval of the cupboard secretary for zero-rating of inputs introduces some other pointless bottleneck and begs several critical questions.

What standards will the Cabinet Secretary use to determine which producers and which products qualify for zero scores? Will producers observe and look forward to the approval all of the time?

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