The taskforce formed to revive the industry has proposed its return at a steeper rate of seven percent on both imports and ex-factory prices.
When former Treasury Cabinet Secretary Henry Rotich scrapped the levy in 2016, it was being charged at a flat rate of Sh5 per kilogramme.
Kenyans may have to pay more for sugar as industry players mull a consumption tax to bankroll affordable credit to cane farmers in a raft of turnaround measures.
Almost four years after the Treasury scrapped the Sugar Development Levy (SDL), the taskforce formed to revive the industry has proposed its return at a steeper rate of seven percent on both imports and ex-factory prices.
When former Treasury Cabinet Secretary Henry Rotich scrapped the levy in 2016, it was being charged at a flat rate of Sh5 per kilogramme.
“It is recommended that the SDL be reinstated as a source of affordable credit to support the industry’s financial requirements,” the sugar taskforce said in a report presented yesterday to President Uhueru Kenyatta.
“Re-introduction of the SDL at the rate of seven percent on the ex-factory for locally manufactured sugar and CIF value on imported sugar to support the industry … ring-fence the fund for research, development, regulation and promotion of the sugar industry,” added the team that was chaired by Kakamega Governor Wycliffe Oparanya.
The proposals come just three months after Parliament published a Bill to reintroduce SDL. The sugar Bill sponsored by Kanduyi MP Wafula Wamunyinyi seeks to empower Agriculture Secretary to impose the levy on domestic and imported sugar.
SDL was started in 1992 as the only source of loans for cane development. The cash financed subsidised fertiliser as well as the building of roads and bridges in the sugar belt. And just months before it was dropped, it had become a source of bailout cash for millers in financial distress.
The team has also recommended the much contested zoning of the sugar-growing areas into five regions saying that it will guard against cane poaching and increase production of the sweetener for local consumption and export.
The five zones will be Central, Upper western region, Lower western region, Southern region and Coastal regions.
Also on cards is the scrapping off of Sh2.4 billion that farmers owe the SDL fund and the restructuring of the boards of all the publicly-owned sugar millers.
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