Farmers in Kenya to pay 5% tax for every 100 Kenyan Shillings made from the sale of their farm products. This is all part of the plans of President William Ruto’s Federal Government to take in more revenue into the system for the new year.
The presidency in its defense of the tax has released a statement stating how the agriculture sector in the country was undertaxed yet represented the highest employer of labour in the country.
Njugna Ndung’u, the Treasury Cabinet Secretary is one of the major brains behind the introduction of this tax is a withholding tax on all farm produce which is now subject to the approval of parliament.
See the buttressing statement from the Treasury Cabinet Secretary
“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,”
Famers in Kenya to Pay 5% Tax For Every KSh 100: Challenges on Collection
The government in its statement has also acknowledged the unique challenge of the Agriculture sector which is the fact that it is highly informal.
The high informality in the sector makes it difficult to have all farmers captured in the tax net which will guarantee an effective collection.
To mitigate this challenge, the government has assured that it would put in place proper mechanisms to ensure optimal collection from Kenya farms.
One of the mechanisms highlighted is to intensify efforts on tax education amongst Kenyan farmers, pointing out the importance of taxation and their obligations to paying as a sacred role in nation-building.