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Rotich’s decision to lower duty on wheat faulted

BUSINESS
By Lee Mwiti | June 11th 2016
By Lee Mwiti | June 11th 2016
BUSINESS

Wheat farmers will suffer the most after the Treasury lowered import duty on the produce from 35 to 10 per cent.

Speaking in a public forum to discuss Treasury Cabinet Secretary Henry Rotich’s budget proposals, financial services provider Grant Thornton, senior tax and advisory partner Parag Shah said the move was ill-fated and a blow to farmers since it was only meant to protect local millers, but slowly strangle local producers.

“I know of local millers who import very high quality wheat grain from Russia and the Far East which also comes cheap. They don’t like engaging local farmers. The remission on import duty to 10 per cent will only favour these elite millers, but affect the farmers,” explained Shah.

The financial services provider also took issue with Treasury’s move to exempt from VAT products from Export Processing Zone (EPZ), saying this will not kill local industries.

Tax amnesty

“EPZ can only sell 20 per cent of its entire products to the local market. The rest will go to export markets. That is a very small percentage for Kenyans to benefit from,” Shah added.

The proposed Increase in air passenger service charges from $40 (Sh4,043) to $50 (Sh5,054) for international travel and Sh500 to Sh600 for local travel, was also termed as too little to create any significance, but might contribute in lowering tourist numbers, given that many tourists depend on air travel.

The tax advisers also requested for proper guidelines for the tax amnesty given to those holding assets and deposits in overseas banks.

Kenya Revenue Authority (KRA) head of legal affairs Sylvester Okello explained that the amnesty will apply only to those who will return their properties back to the country.

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