The Kenya Tea Development Agency (KTDA) has strongly opposed a new proposed levy that will have farmers remit one per cent of their tea sales to the Kenya Revenue Authority.
Speaking when he appeared before the National Assembly Committee on Agriculture and Livestock Development on Friday, the KTDA National Chairman, Senior Counsel Chege Kirundi, urged the MPs to scrap it.
The levy, proposed in the Tea (Amendment) Bill, 2023, will add to the already burdensome tax on tea farmers.
Kirundi emphasised that existing taxes already overburden smallholder tea farmers, and the primary goal is to maximise their returns.
The KTDA Chief Executive Officer, Wilson Muthaura, backed the chairperson's remarks, revealing that the priority of the agency was to protect the farmers' income and not tax them more.
“This industry thrives because of the resilience of our smallholder farmers," Muthaura said.
"Our priority as KTDA is to protect their incomes and ensure that every shilling they earn from their tea translates to better livelihoods for their families."
The tea industry supports over 650,000 smallholder farmers and millions more indirectly, through the value chain, and continues to be the country’s most significant foreign exchange earner.
According to Muthaura, KTDA would maintain its priority of improving farmers’ returns through better management, technological innovation, and sustainable practices.
“Policy must empower the farmer, not burden them. We must create a fair environment that rewards hard work and maintains Kenya’s position as a global leader in quality teas."
He further appealed to the legislators to adopt a consultative approach with industry stakeholders before enacting measures that could negatively impact production and earnings.
This development comes just weeks after the Ministry of Agriculture enforced a 4 per cent levy on sugar millers and importers for the Sugar Development Levy.
The levy is payable by every miller and every person who imports sugar at the rate of 4 per cent of the ex-factory price for domestic sugar and 4 per cent of the cost, insurance, and freight (CIF) value of each consignment of imported sugar.
