Kenya: Remove Vat on Poultry Farm Equipments, Government Told

Nairobi — Poultry farmers want the Government to reduce taxes on poultry farm equipments amid high operating costs.

Kiambu Poultry Farmers Cooperative Society says the value added taxes (VATs) on the equipments coupled with high prices of animal feeds have made business tough.

“The 16 percent value added tax on farm implements has affected most farmers in this region and we are the largest chicken growing area in Kenya. Farmers face a difficult time because they are paying VAT on feeds, machineries and equipment,” the Cooperative Chair Zachary Munyambu said.

Several poultry farm inputs such as incubators, brooders, dryers, ploughs, disc harrows, combine harvester-threshers, and milking machines that were previously zero-rated-now attract taxes-making it hard for the farmers to make their end meet.

“Machinery such as manure spreaders, fertiliser distributors, hay balers, combine harvesters, machines for sorting eggs, machines for preparing animal feed, tractors and poultry incubators should be imported duty and VAT-free, so that farmers can improve their yield and we are food secure,” said Munyambu.

Growth in the sector has faced a number of challenges from failed weather to high cost of inputs such as fertiliser and diesel that is used to drive farm machinery.

The cost of petroleum products and their by-products have been rising in recent months on the ongoing Russia-Ukraine war as well as inflation.

Humphrey Mbugua, a poultry farmer expert said the introduction of taxation on input has only worsened the food production problem, denying the country an opportunity to post robust growth.

“The government should look for alternative and creative sources of revenue. Punishing farmers through hefty taxes will be felt in the entire economy,” Mbugua said.

The agricultural sector is estimated to have contracted by 1.2 per cent in 2021, due to adverse weather conditions.

Despite the expected poor weather outlook, uncertainty linked to the general election in August and global supply chain disruptions due to the Russia-Ukraine war, agriculture is expected to grow by 4.6 per cent in 2022 driven by government subsidies on fertilisers and strengthening external demand.

The government has allocated Sh46.7 billion to the sector, a decrease from Sh69.7 billion in the 2021-2022 period. The allocation is meant to cater for the various ongoing projects and programmes.

To boost agricultural produce, it will be key for the Government to increase investment in key programmes and projects that will lead to higher yield, notably provision of subsidised fertiliser, quality and certified seeds and mechanisation, all aimed at ensuring that we produce enough food to feed ourselves as a nation.

There may be a need to implement reforms that ensure sustainable farming practices.

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