Ruto introduces new tax on all Kenyan farmers
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All Kenyan farmers to pay Sh5 for every Sh100 they make in the new tax plan by the Ruto administration
All Kenyan farmers to pay Sh5 for every Sh100 they make in the new tax plan by the Ruto administration.
The administration of President William Ruto now intends to pursue additional taxes, presumably in an effort to generate more revenue, with a focus on farmers this time around.
According to a medium-term revenue strategy by Treasury Cabinet Secretary Prof. Njuguna Ndung’u, government wants every farmer delivering their produce to the markets to pay Ksh.5 for every Ksh.100 obtained from sales.
CS Ndung’u, in his medium-term revenue strategy, says the agricultural sector is undertaxed.
“The Government will introduce a withholding tax on agricultural produce which will be a final tax at a rate not more than 5 per cent of the value of the produce delivered to the cooperatives or other organised groups,” says Treasury.
The Treasury document adds that “the Kenyan economy is dependent on the agricultural sector contributing an average of 21.2% of the GDP and the highest employer compared to other sectors.”
Treasury acknowledges that the sector has unique challenges, thereby making taxation difficult.
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The industry is very unorganized, cash-only, and defined by the belief that it shouldn’t be subject to taxes. Treasury now states that it will set up procedures to extract the highest possible tax from Kenyan farmers.
In the event that the plans are implemented, the government will impose a final agricultural produce withholding tax, with the maximum amount being 5% of the produce’s worth that is given to cooperatives or other organized groups.
For every Ksh.100 a farmer gets in the market Ksh.5 will belong to the government.
To achieve the maximum taxes, the government will intensify taxpayer education to ensure that taxpayers understand their role in nation-building and the need to pay taxes.
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