Treasury directed to cut taxes for tea farmers

resident Uhuru Kenyatta has directed Treasury to look at taxes such as VAT and import duty that hinder the growth of the tea sector.

The President impressed on the Ministry of Agriculture, KTDA and other key players in the tea sector to cushion farmers from unnecessary taxes and levies to lower the cost of production and increase returns.

“Tea is one of our chief foreign exchange earner and we have to ensure that our farmers are comfortable and continue producing,” President Kenyatta said.

Kenya Tea Development Agency (KTDA) also announced in the same stakeholder meeting that tea farmers will get a mini-bonus this month despite poor tea prices.

The meeting resolved that a standard will be set below which low quality tea will not be allowed into the country.

KTDA Chairman Peter Kanyago expressed concern over tea hawking, saying it also contributed to quality reduction.

Others at the meeting were Agriculture PS Sicily Kariuki, KTDA MD Tiampati Lerionka, members of Tea Board of Kenya, East Africa Tea Association, Kenya Tea Growers Association, Nyeri Governor Nderitu Gachagua who represented the Governors’ Council and Export Promotion Council CEO Ruth Mwaniki.

Price stabilization

The meeting proposed the establishment of a price stabilization fund through partnership between the Government and the tea industry.

President Kenyatta said the tea sector must be protected and farmers assured that ‘whatever happens’ there is a payment below which prices cannot go.

As a move to ensure tea farmers reap maximum benefit, the President said regulatory framework at the Mombasa tea auction should be improved to ensure transparency.

He emphasized that implementation of the proposed electronic tea auction through public private partnership (PPP) should be fast-tracked.

The President also asked KTDA to boost capacity during glut. He urged county governments in tea growing areas to work with KTDA to improve the tea agency’s capacity through roads improvement.

On low excise duty charged on tea imports, Mr Kosgei said it should be raised from 25 per cent to 100 per cent as charged by other tea producing countries outside the common markets to inhibit excess importation of value added tea.