Molo MP Kuria Kimani, who doubles as the chair of the Finance Committee in the National Assembly, has insisted that calls for farmers to register on the Electronic Tax Invoice Management System (eTIMS) are not targeting to expand the tax base.
Speaking in an interview with the Standard on Monday morning, Kimani explained that the registration would accord the farmers a chance to sell their produce directly to processors, opening them up to better returns.
He further revealed that brokers had learned of the trick early on and registered on eTIMS from where they buy produce from farmers at extremely lower prices and sell it at a profit.
"If you are selling your avocados to (a brand) and it has to file their taxes to show their expenses where they spend their money on for them to be allowed to be deductable from their corporate tax, they have to be generated from eTIMS," he explained.
"This avenue is just providing a sought of a receipting system. In the absence of it, you will have brokers register on eTIMS, buy the produce from farmers at whatever price they want, and sell them to (the brands) and this is what we are trying to avoid."
The lawmaker further noted that a majority of farmers were scared of onboarding onto the portal in fear that the government was targeting them to expand its tax base.
As a result, he explained that farmers who earn less than Ksh24,000 returns should not worry about taxation since their income is lower than the State's Constitutionally approved taxable income.
He further assured those whose annual gross revenue is less than Ksh1 million will not be targeted for the turnover tax.
"If farmers are earning less than Ksh288,000 per year, they don't get to pay any tax because if you are making an income of less than Ksh24,000 per month, you don't have to be worried because you will not pay taxes," he added.
"To fall under the turnover tax bracket, you must have a gross income of at least Ksh1 million per year. Let us stop being too speculative. The only purpose is we want to enable you to trade directly with that institution and not have these brokers take advantage of your produce."
Treasury, in its Medium-Term Revenue Strategy, proposed a tax rate of 5 per cent of the total value of farm produce delivered to cooperatives and other organised groups. The Ministry sought to effect the tax within the Financial Years 2024/2025 and 2026/2027.
Treasury explained that the tax was aimed at helping raise revenue for government programmes.
Lawmakers and farmers, however, hit out at the State arguing that the proposal was exploitative to farmers already grappling with the high cost of production.
"As an MP, I can tell there is a problem with this proposal. We are the aggregators; the aggregators should be the farmers. These avocado taxes should be imposed on the consumers. The tax should be carried in by the exporter," lamented Gatanga MP Edward Muriu.
