Kiambu dairy farmers call for tax review

Dairy farmers in Kiambu county have urged the government to go slow on taxes to reduce the cost of production.

The farmers, led by Jane Ngoiri, said taxes in the Agricultural have seen the prices of farm input making farming unprofitable.

The government, as it seeks to cast its revenue basket wider, has introduced a withholding agricultural produce tax at a rate of five per cent of the value of the produce delivered to the market.

This means that for every Sh100 a farmer earns, Sh5 goes to the government.

Ngoiri spoke at the sidelines of the Githunguri Dairy Cooperative Sacco annual general meeting.

The meeting was attended by 33,000 farmers.

“The taxes including the excise duty on various supplements used in animal feeds production has seen the prices augment at alarming levels. The worst part is that the feeds currently being manufactured are of low quality and this has drastically reduced production,” Ngoiri said.

She said many farmers are struggling to settle their loans.

“Most farmers have been relying on loans to expand their ventures but currently the loans have become very expensive. We plead with the government to consider reviewing some of the taxes introduced for the sake our economic growth and sustainability,” Ngoiri noted.

Farmers Anthony Maina and Patrick Nyaga said many Kenyans, especially those at the bottom of the pyramid are hurting.

“The Government should be creating mechanisms to empower farmers by providing tax reliefs, incentives and subsidised farm inputs,” Nyaga said.

GDC Sacco chairman Joseph Mburu said dairy farmers are also hurt by the taxes.

“The enactment of the Finance Act 2023 has brought about the introduction of a raft of tax measures and amendments to the various tax Acts which have in turn increased the cost of doing business hence a reduction in profit margins,” he said.

Mburu said the high fuel and energy prices have also affected the cost of living.

“This has translated into a higher cost of dairy farming thus lesser incomes and reduced savings leading to increased non-performing loans that continuously eat into our profit margins,” he said.

Despite the pitfalls, the Sacco has tremendously grown for the year ended December 31, noting that the asset base has increased from sh 4.2 billion in 2022 to Sh5 billion.

He said members will enjoy increased dividends which rose from sh141 million in 2022 to sh 212 million in 2023.

“The board recommends a return of 13 per cent dividend on share capital and 6.5 per cent on member deposits thus a total sum of sh 212, 982, 190 will be distributed to members,” he said.