Miraa export resumes after tax dispute is resolved
Traders package miraa for sale at Kabuitu market in Igembe Central on January 8, 2017. The export of the commodity to Mogadishu resumed on Monday evening after Somalia authorities rescinded their earlier decision to increase taxes. PHOTO | PHOEBE OKALL | NATION MEDIA GROUP
What you need to know:
- Somalia had last week increased the tax from Sh309 to Sh360.5 per kilo of khat.
- Somalia relies heavily on taxes from khat.
- Mogadishu, the largest miraa export market, takes in about 50 tonnes of the commodity daily.
- Besides the government tax, traders are required to pay other levies to individuals who control the business.
The export of miraa to Mogadishu resumed on Monday evening after Somalia authorities rescinded their earlier decision to increase taxes on the commodity.
Somalia had last week increased the tax from Sh309 ($3) to Sh360.5 ($3.5) per kilo of khat, leading to a four-day boycott by Kenyan miraa exporters.
Nyambene Miraa Traders Association (Nyamita) spokesman Kimathi Munjuri said Mogadishu officials and traders agreed on a tax of Sh247 (2.40USD) per kilogramme of the herb after four days of negotiations.
“We are glad that the authorities and Somali importers agreed on a friendly tax (rate). However, we are yet to get official communication on the agreement. We resumed business on Monday evening with 20 tonnes of miraa,” Mr Munjuri said.
He noted that Somalia relies heavily on taxes from khat and called for a lasting solution to the current challenges facing the miraa trade.
REMOVING EXTRA LEVIES
Mr Munjuri said Mogadishu, the largest miraa export market, takes in about 50 tonnes of the commodity daily which is valued at more than Sh100 million.
“The daily tax paid on miraa in Mogadishu amounts to Sh15 million. The herb therefore contributes immensely to the economy of Somalia,” he said.
The Nyamita official said they expect more engagements with Somalia government with a view to removing extra levies that have made tax per a kilo of miraa to rise to Sh1,000 (10USD).
“Besides the government tax, traders are required to pay other levies to individuals who control the business. These are some of the issues we would like the Kenyan government to address,” he said.
The various grades of miraa exported to Somalia include ‘beat’, ‘grade’ and ‘special’.
The best quality miraa (beat) is retailing at up to Sh150, 000, ‘grade’, Sh70, 000 and ‘special’ Sh50, 000 per 90kg sack.
