Tax
The chairperson of the Finance and National planning committee in the national assembly, Kuria Kimani, has said the Electronic Tax Invoice Management System (e-TIMS) is meant to protect farmers from buyers import produce from other countries.
According to Kimani, who was speaking to farmers in Murang’a on Wednesday, the requirement that farmers will have to produce Electronic Tax Invoice Management System (e-TIMS) invoices every time they make a sale, was to protect farmers from buyers who have for the last several years been importing produce from other countries and saying it is locally sourced.
He said that farmers are misunderstanding the clause as it does not require them to pay tax for agricultural produce as the finance act only calls for farmers to be registered on e-TIMS and not to be taxed as it has been widely claimed.
“I know that law clause by clause as I led the lobbying for it to be passed and there is no clause we put in it requiring avocado farmers to be taxed,” Kimani said,
Kimani said The clause was not meant to impose a tax on agricultural produce but to provide for the registration of farmers under e-TIMS.
“There is no law that imposes taxation on our farmers, there is a requirement to register on e-TIMS and now I hear KRA has come to you to ask for taxes.” he said. Kimani assured the farmers that the legislators will amend this law again and again until it is clear.
This comes a few weeks after avocado farmers from Murang’a County vowed not to pay the new tax that came into force last month and which requires them to pay Sh. 5 for every Sh. 100 they make from their farm produce.
The farmers who spoke at Kibereke grounds in Kandara directed their anger at a team of KRA officers who had been invited to explain more about the tax complaining that they are already grappling with the high cost of living that has pushed the cost of farm inputs up while their earnings remained meager.
The sentiments of the farmers were backed by a team of leaders from Murang’a County who vehemently opposed the law saying it was punitive to small scale farmers.
Finance Cabinet Secretary, Njuguna Ndung’u, said the agriculture sector is undertaxed as it contributes about 21.2 percent of the Growth Domestic Product (GDP) yet its tax revenue contribution is less than 3 percent.
In the Medium-term revenue strategy 2023, the state had announced that it would apply a five percent withholding tax on all agricultural produce sold to co-operatives in a bid to raise Sh.14 billion in the next three years.
