Following government’s decision to drop Value Added Tax (VAT) on processed animal feeds and input products, local agro-manufacturers and millers are upbeat saying their sales have since significantly improved.
Speaking to The New Times yesterday, Simon Bagabo, the Managing Director of Premier Animal Feed Industry (Pafi), located in Rwamagana District, said their sales had soared within just weeks of the directive.
Last month, the Minister for Finance and Economic Planning, Claver Gatete, accepted the inclusion of processed animal feeds on the list of agricultural products exempted from VAT.
“Prices of animal feeds have reduced by 20 per cent and this will certainly boost production,” he said.
Bagabo said his $2 million plant was almost closing shop due to hefty taxes, adding that the decision to scrap VAT on animal feeds was a shot in the arm for his business.
“We expect farmers to benefit from more affordable prices and increased production of animal feedst,” he said.
Meanwhile, farmers are optmistic their production will increase thanks to the reduced prices of animal feeds.
Mathias Bizimungu, a poultry farmer in Rwamagana, spoke of the importance of dropping VAT on animal feeds, saying that he had given up on processed feeds.
“The prices were out of reach. We were actually struggling with the chicken to grow so that we can sell and stop the business. In farming, it is give and take…so, when you don’t feed chicken or cows as required, they don’t give you the expected returns,” he said.
“Chicken feeds have reduced to Rwf280 from Rwf320 per kilogramme. The same applies to other animal feeds. So we have reason to smile since our productivity will increase,” he said.
Claudette Mukagakirane, a farmer, however, said farmers will realise the reduction in prices only if all manufacturers oblige.
“There is no doubt the current prices will allow many farmers to buy quality feeds. But this will depend on whether the drop of VAT is felt by the final consumer, the farmer. The government should, therefore, be on the watch to protect us,” she said.