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Market News

VAT prices Kenya out of East African seed market

Kassim Owino
Mr Kassim Owino. FILE PHOTO | NMG 

Local seed producers are unable to sell outside the country as they cannot compete favourably because of costly product resulting from a 16 percent value-added (VAT) tax levied on vegetable seed.

Seed Traders Association of Kenya said they could not sell seed in Uganda, Tanzania and Rwanda and Burundi because of the VAT.

Chairman Kassim Owino said the VAT comes on top of high cost of production in Kenya, which is 20 percent more than in neighbouring states.

“We cannot compete outside Kenya because of the 16 percent VAT that we pay on vegetable seed. We would like the government to abolish this levy to enable seed makers to take advantage of the regional market,” he said.

Mr Owino said it is only Kenya that charges the levy on production of seed.

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The official said Kenya has one of the best seeds in the region and should use this opportunity to increase sales by abolishing taxes that hamper competitiveness.

“Recently we saw VAT on pesticide abolished and we would like the same to be done on vegetable seeds,” he said.

Last week, the lobby group complained that multinationals, which sell seed to Kenya are withdrawing from the market after the government moved a plants agency out the port, leading to delays in clearance of the consignments.

The absence of the Kenya Plant Health Inspectorate Service at the port, left inspection to Kenya Bureau of Standards, which lacks the capacity to deal with plant materials.

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