Sugar cane farmers have opposed the proposed VAT on transportation of cane to factories for processing, asserting that it would spell doom for the sector.
Kenya National Federation of Sugarcane Farmers expressed concern over the Finance Bill 2024, which proposes a 16 per cent VAT on such transportation.
In a letter addressed to the chairperson of National Assembly Committee of Finance and the Principal Secretary Ministry of Agriculture, they termed the proposed tax as punitive and discriminatory.
Signed by the federation chairman Ezera Okoth, treasurer William Kopi and secretary Killion Osur, the farmers urged that the amendments be scrapped from the bill.
"We as a federation representing sugarcane farmers strongly oppose this punitive and discriminatory proposed tax amendment and urge that it be scrapped from the proposed Finance Bill 2023," the letter states.
The farmers pointed out that currently the cost of production is substantially high and the industry is bleeding due to a myriad of challenges.
They argued that the introduction of VAT in the transportation of sugarcane will aggravate the situation and kill farming.
They said that the current average cane crushed across all sugar mill is 1.2 million metric tonnes annually and the additional VAT will translate to Sh 164 million, being additional cost to the framers monthly.
They questioned the justifications of the levy , of importing duty free sugar and adding more taxes on transportation of crops to the detriment of other farmers.
"Is the government promoting sugar cane farming in other countries and killing it locally? " the farmers said.
They questioned why other crops were not being subjected to the same VAT.
The letter is copied to the Director Agriculture and Food Authority and the Sugar Directorate.
