Counties

Millers up in arms over new Nairobi cereal cess

paloma

Cereal Millers Association Executive Officer Paloma Fernandes. PHOTO | BILLY MUTAI | NMG

Cereal millers have faulted the Nairobi County government for introducing a new market cess for cereal products, saying the move will increase the cost of doing business in Nairobi.

Further, they said it will adversely affect farmers, millers and ultimately impact consumers who are already battling high input and food costs.

This comes after the Kenya Revenue Authority (KRA), an agent of the county, announced it will charge market cess on cereal millers in Nairobi starting March 1, 2022.

The taxman explained that the cess will be levied on cereals from produce delivered at respective millers’ premises in the capital city.

Cereal Millers Association (CMA) chief executive officer Paloma Fernandes pointed out that the introduction of the market cess at the county of delivery in effect amounts to double taxation.

Citing the current war between Russia and Ukraine, she said this is probably the worst time to add any more costs to an environment where food prices are expected to rise.

This will lead to freight, fuel, fertiliser and ultimately food prices, especially wheat prices, hitting unprecedented levels.

“The CMA is concerned with the introduction of ‘Market Cess’ by KRA on behalf of the Nairobi City Council, that will be detrimental as it will increase the cost of doing business in Nairobi,” said Ms Fernandes.

She explained that agricultural cess should be levied by county governments, on the movement of agricultural produce, from the source county as well as in transit within the county.

However, doing the same at the county of delivery will amount to double taxation on the same essential food items.

“Our understanding is that agricultural Cess is already a form of tax that is levied by county governments, on the movement of agricultural produce from the source county as well as in transit within the county,” said the CEO.

“The idea behind paying cess was to ensure that county of origin (which was supplying the produce) collected revenue to improve and maintained its infrastructure and services towards the agricultural sector,” she added.

The millers are already grappling with inter-county barriers having to pay cess in several counties as the bulk of maize processed in Nairobi is ferried from Rift Valley.

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