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XINHUA NEWS SERVICE REPORTS FROM THE AFRICAN CONTINENT

 

Kenya tax reforms to reduce cost of food: experts  

NAIROBI (Xinhua) -- Kenya’s recently enacted tax reforms have reduced the cost of some basic food items, reducing the household spending for the citizens of East Africa’s largest economy, according to consultancy firm Deloitte in a new briefing released on Thursday.

East Africa Tax Leader Nikhil Hira said the changes contained in the Finance Act 2017 will significantly help reduce the cost of food and lessen the cost of some farm inputs, in a country whose economic backbone is agriculture.

“The expansion of the list of zero rated basic food commodities is a welcome move,” said Hira in reference to zero-rating of cassava and maize flour among other tax reduction.

The East African nation has zero-rated tax on cassava flour and maize flour containing 10 percent or more of cassava flour. Kenya also exempted imported maize from being paid duty for.

Maize is Kenya’s staple food, often milled into flour which is boiled and stirred in to pulp known locally as ugali. Maize is also mixed with beans and boiled.

Cassava is also a growing staple food for millions of Kenyans especially those living in rural areas.

The government has also zero rated unprocessed milk and processed milk for infants in what Deloitte said is an attempt to make more milk products affordable to citizens in the wake of increasing milk prices.

It has further zero rated pesticides in a move expected to lower the prices of such products for farmers and this will in effect result in better farming practices and higher yields. Kenya derives most of its food needs from small scale farming.

The government has been implementing initiatives aimed at encouraging the small holder farmers to increase use of farm inputs like pesticides in order to increase the food yield which will mean the country imports less or no extra food.

             

 

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