Business

Kenyan farmers on Monday warned that charging VAT on agricultural inputs would lead to further increase in food prices even if food items are exempted from the intended VAT Bill 2012.

The Organizations which include the Eastern Africa Grain Council (EAGC), the Parliamentary Committee on Agriculture, the Cereal Growers Association and the Kenya Maize

Development Program were addressing the annual Agribusiness Expo that brought together players in the grain and agribusiness sector.”The government should extend the

exemption to agricultural inputs as any additional costs on farm production would still end up being transferred to the consumer,” the various key stakeholders in the agricultural sector said in a joint statement issued after the 2-day meeting in Nakuru, about 200 km northwest of Nairobi.

The government recently backed down on plans to introduce a 16 percent VAT on food items that was proposed in the VAT Bill 2012 following intense pressure from a cross- section of Kenyans.

The EAGC Chairman Judah arap Bett said they welcomed government’s decision to exempt food prices but said this would be meaningless if farm inputs were levied the same tax as farmers would transfer any additional costs to the consumer. Eastern Africa Grain Council Executive Director Gerald Masila said that the bill contains certain provisions that go against the spirit of the East African Community Common market provisions on taxation.

Agencies