Farmers argue that the introduction of the levy exposed Kenyan tea to unfair competition from other tea exporting countries. FILE
What you need to know:
The government introduced the levy on tea exports at one per cent in January 2012, raising it from the original 0.46 per cent per kilogramme of tea which was levied at source.
Tea farmers have petitioned the Senate to abolish the ad valorem levy on exports and other burdensome taxes to protect the industry from collapse.
The government introduced the levy on tea exports at one per cent in January 2012, raising it from the original 0.46 per cent per kilogramme of tea which was levied at source.
A group of tea farmers from Kisii County, through Senator Chris Obure have filed a petition in the Senate seeking investigations on the effects of each of the taxes imposed on the industry on production, processing, local sales, exports, incomes to farmers and payment to workers in factories and farms.
The petitioners argued that the introduction of the ad valorem levy dramatically raised the cost of Kenyan tea meant for export and exposed the produce to unfair competition from other tea exporting countries.
While presenting the petition on behalf of the farmers, Mr Obure said the Senate committee responsible for agriculture should identify all taxes currently imposed on tea and payable by stakeholders in the industry.
“Your humble petitioners pray that the Senate investigates the justification for imposition of the tea levies and identify the expansion potential and economic opportunities when unnecessary taxes are removed or substantially scaled down,” Mr Obure said in the petition signed by nine tea farmers.
The farmers want the Senate to interrogate measures that the Agriculture ministry has placed to address the tea industry taxation related problems.
“We pray that the Senate interrogates the plans, if any, by the national government to mitigate the continued losses suffered by Kenya Tea Development Agency (KTDA) and farmers due to taxes.’’
The petition to the Senate comes in the wake of falling tea prices in the world market which have forced most farmers to switch to other crops and forestry, considered more profitable.
Prices at the Mombasa tea auction on Wednesday fell below Sh170 ($2) per kilogramme of processed tea, the first time since 2008 due to the flooding of the auction by producers ahead of Easter holidays break.
PAYE Tax Calculator
Note: The results are not exact but very close to the actual.
