Sorghum, millet farmers spared as MPs retain tax breaks

What you need to know:

  • He said giving the minister that power would amount to giving the minister power to determine whether sorghum and millet would be imported, affecting farmers in areas such as Siaya County.

  • EABL would be the hardest hit if the power to give remissions was to be taken away from the Treasury CS as they are the makers of Senator Keg, the low-end beer made from sorghum.

Makers of beer who use sorghum, millet or cassava as their ingredients were spared higher taxes on Tuesday evening after MPs fought to retain the powers given to the Treasury Cabinet Secretary to give them tax breaks.

There was heated debate in the National Assembly over the proposal by Kiambu MP Jude Njomo, which was prosecuted in his absence by Gem MP Jakoyo Midiwo.

Mr Midiwo last week brought a petition against East African Breweries Limited alleging tax evasion and asset-stripping and was on the warpath again on Tuesday evening as the Finance Bill was taken through the last stages.

EABL would be the hardest hit if the power to give remissions was to be taken away from the Treasury CS as they are the makers of Senator Keg, the low-end beer made from sorghum.

The Finance Bill is important as it implements measures proposed by Treasury in the Budget Statement intended to raise more revenue for the government. MPs also use the opportunity it offers to change other laws that have an impact on revenue-collection.

Mr Midiwo wanted to remove the part of the Excise Duty Act that states: “The Cabinet Secretary may by notice in the Gazette, grant remission of excise duty, wholly or partially, in respect of beer or wine made from sorghum, millet or cassava or any other agricultural products, (excluding barley), grown in Kenya.”

Mr Midiwo argued that the section “seems to want to make laws for one company.”

“When you say that a minister can give remissions up to 90 per cent, what are you telling the people? We can’t make laws contrary to the Constitution,” said Mr Midiwo.

Siaya County

He said giving the minister that power would amount to giving the minister power to determine whether sorghum and millet would be imported, affecting farmers in areas such as Siaya County.

“The people who are seriously growing these things are our neighbours Tanzania. We cannot participate in something that will be bad for our people,” he added.  

Mr Langat, the chairman of the Finance Committee, however opposed the proposal.

“We cannot do major policy decisions overnight. That position was given so that we encourage the brewers to go to farmers, those who grow millet and sorghum,” said Mr Langat.

He argued there was inconsistency in giving the minister those powers in the Excise Duty Act and then taking them away within six months.

He was backed by MPs Irungu Kangata (Kiharu, TNA) Korei ole Lemein (Narok South, URP) and Joseph M’eruaki (Igembe North, TNA).

“We have beer in Kenya being made from these three products. The law ensures that farmers who grow these three products have a market for them,” said Mr Kangata.

Majority Leader Aden Duale asked Temporary Speaker Rachel Shebesh to rule whether the section in the Excise Duty Act is constitutional and whether it takes power to make laws away from Parliament as mandated by the Constitution.

Mr Lang’at however successfully argued that the legality of the law has never been in question and there was never such a question when the Excise Duty Act was being prepared.

Mr Midiwo’s proposed changes were defeated in the vote by acclamation.