A number of horticulture firms have left Narok County after the regional government imposed a Sh100 duty on a crate of French beans that is produced there.
The county introduced the levy through its financial bill recently, pushing up the unit cost of producing the crop in Narok.
Huge firms normally lease land in the country for production of horticultural produce.
A number of horticulture firms have left Narok County after the regional government imposed a Sh100 duty on a crate of French beans that is produced there.
The county introduced the levy through its financial bill recently, pushing up the unit cost of producing the crop in Narok. Huge firms normally lease land in the country for production of horticultural produce.
Fresh produce consortium, a horticulture lobby group, said at least three firms have pulled out of the county because of the new levy.
“We know of three firms that have pulled out of Narok because of the new levy that the county has imposed on French beans,” said the lobby.
It said that the counties should not impose too much levies on agricultural produce as the move will discourage investors from doing business in their regions.
The high taxes have not affected French beans investors alone.
There have been cases of flower firms closing shop in Kenya and relocating to Ethiopia in the recent past over double taxation by the counties.
The lobby urged the national government to intervene in order to save the sector that is one of the major foreign exchange earners.
The group said so far Narok has been rigid but other counties have been cooperating with the horticulture farmers in addressing the issues of double taxation.
The lobby said they have engaged the county for some time but they have only been getting empty promises in regard to taking action.
This comes at a time when the Department of Horticulture has introduced a 0.25 percent levy on the value of the fresh produce meant for export.
OUT OF BUSINESS
The new levy, which is four times of the previous Agricultural Produce Cess, is charged basing on the value of free on board (FOB) consignment.
Kenya Flower Council says the earnings from horticulture will drastically drop this year as a result of this tax even as the sector is projected to have a slowed growth in the first quarter.
Players in the sector estimates the new levies will increase the taxes from the current annual average of Sh90 million to Sh377 million annually, pointing out that the tax will push over 40 percent of horticulture export firms out of business.
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Note: The results are not exact but very close to the actual.
