Horticulture sector plea for billions in VAT refunds

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Dr Bimal Kantaria, Chairman, Agriculture Sector Network - The Tax Bill in its current form will have negative consequences
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Nairobi, March 25, 2020 The Agriculture Sector Network (ASNET) has lauded President Uhuru Kenyatta for directing the Kenya Revenue Authority to expedite VAT refunds to businesses.

The Presidential directive came as players in the horticulture export industry held a crisis meeting to deliberate on support systems for the sector that faces imminent collapse as the corona virus ravages the global markets infrastructure.

Of the billions the President said the taxman owes businesses in VAT refunds, the horticulture sector is owed in excess of KSH 12 billion, says the Fresh Produce Exporters Association of Kenya Chief Executive Officer Hosea Machuki while his counterpart at the Kenya Flower Council said last week the flower farms are owed Ksh 9 billion.

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“Urgent interventions are required to save the multibillon Kenya horticulture export sector that has been heavily affected by the outbreak of Coronavirus that has locked out global markets to the country’s fresh produce”, said Bimal Kantaria, Co-Chair, ASNET and Managing Director, Elgon Kenya Ltd, an agriculture inputs supplier.

In addition to the VAT claims, ASNET is pleading for direct cash injection through advances and soft loans to support farms to stay afloat through the difficult financial period.

The flower sector urgently needs the money to support key operations to keep the flowers alive as the growers wait for the Corona virus effect to slow and resumption of normal business. “The sector has contributed billions in tax revenues and a huge amount of forex to the nation, and it’s time we stood by them”, said Mr Kantaria.

“The industry, a leading foreign exchange earner, is also a mass employer. Last year it brought in KSH 120 billion, supports an estimated eight million people and employs some three million directly and indirectly through the value chain.

These jobs and the livelihoods it supports are in jeopardy. Beyond 90 days the sector will crumble leaving in its wake a trail of destruction as one of the world’s most advanced agribusiness sectors collapses”, Mr Kantaria reiterated.

The umbrella organization of industry support bodies held a crisis meeting with the Kenya Flower Council and the Fresh Produce Exporters Association of Kenya, Tuesday, in which the European Union Trade Advisor Mr Martijn Boelen was present, to deliberate on an action plan to salvage the industry.

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