The government has announced plans to operationalise the food crops regulations gazetted five years ago targeting importers and exporters.
In a notice dated May 28, the Agriculture and Food Authority (AFA) says effective July 1, cereals, legumes and pulses and roots or tubers will now be subjected to taxes.
The Crops (Food Crops) Regulations, 2019, were drafted by the authority together with the ministry and relevant stakeholders.
They were meant to guide the promotion, development and regulation of production, processing and trade of the particular crops in the country.
“Pursuant to provisions of these regulations, the authority through the Food Crops Directorate hereby notifies all food crops importers and exporters that starting July 1, 2024, the imposition of levies will commence…,”the notice issued by AFA Director General Bruno Linyiru reads.
“The rates for the levies will be as tabulated in the Third Schedule of the regulations,” it adds.
Under these new regulations, cereal imports will incur a 2.0 per cent customs value charge, while exports will be taxed at 0.3 per cent.
Similarly, legumes and pulses imported into the country will be subjected to a 2.0 per cent customs charge, with exports facing a 0.3 per cent levy.
For roots and tubers, the import tax is set at 1.0 per cent, with a 0.3 per cent tax on exports.
“You are required to take note of this development and prepare to comply,” it states.
This development is now expected to have significant implications for both local and international traders, potentially affecting prices and supply chains.
The new levies are seen as part of the government’s plan to widen its revenue base which has argued that such levies are necessary for regulating the market and protecting local agriculture.
The push for a broader tax base has been President William Ruto's rallying call since he took over power.
"We must move our revenue collection from 14 per cent to 25 per cent. From Sh2.1 trillion to between Sh4 trillion and Sh5 trillion," Ruto said in a past event.