Flower exporters to sue over export forms crisis

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The flower industry is now contemplating suing the government for compensation on losses incurred following failure by the Kenya Revenue Authority (KRA) to supply crucial export documents as the taxman requests for patience as he seeks a solution to the crisis.

“We don’t have four weeks to wait,” the flower exporters now tell KRA.

The exporters, who sought anonymity, are saying that under the Constitution, businesses have a right to trade without impediments and this is the chapter they will invoke to compel Treasury to pay for lost revenue.

KRA had earlier this week sent a press statement to media houses saying that it was looking into the possibility of engaging services of an alternative reliable printer after the government press failed to deliver the vital documents. The exercise according to KRA might take four weeks before they deliver the first batch of these forms.

The documents, Euro 1 and Generalised Scheme of Preferences (GSP) forms, used to verify whether goods have originated from countries with which the importing nation has a duty-free bilateral agreement, have completely been unavailable from KRA offices since last week crippling the multi-billion shilling sector.

Last week, the Kenya Flower Council (KFC) CEO Mrs Jane Ngige raised a red flag saying the sector stands to lose more than Sh4.5 billion monthly if the crisis is not resolved fast. She said the Council on behalf of the flower industry had since sought the services of a lawyer to advise the matter.

She said KRA should have anticipated this crisis and sourced for an alternative printer since the problem did not crop up overnight as the shortage started creeping-in in 2010.

As at now, it is almost apparent that the industry will continue counting losses as they await KRA to sort out this mess.

The KRA Commissioner General, Mr. John Njiraini has tasked the Customs Commissioner and the Marketing department to contact and update  the KFC on how they are responding to the shortage of GSP forms issue and asked for patience from irate exporters as the authority works towards a permanent solution.

This was after KFC wrote to KRA demanding immediate action or compensation for the losses being incurred by the flower producers and exporters.

Reacting to the communication from KRA, Mrs. Ngige says that four weeks to select an alternative printer would kill the flower sector, whose goods are highly perishable by nature.

“We can’t store flowers neither can the stems ready for harvesting stay in the farms as this would spoil the production cycle,” she says.
Flower harvesting happens daily and the farms do not have the capacity to handle tonnes and tonnes of waste likely to be generated from the un-exported flowers.

And with the high flower sale season around the corner and exporters stuck with their flowers, the sector is set to suffer insurmountable damages.

“Luckily, this is the low season, therefore the damage is not as much. I don’t want to imagine what a crisis it will be would be if the high season finds us in this mess. If KRA takes four weeks to avail the forms, we are doomed,” says one of the distraught flower exporters.

Aside from the loss of revenue, flower farm workers are also likely to lose their livelihoods since the farmers will be incurring double losses by paying the workers to harvest flowers they will not profit from.

“No grower will keep workers to harvest flowers that are not being sold. Whichever way you look at it, this situation has spoilt the industry as an investment choice and investors will think twice to put their money in it,” adds Mrs Ngige.

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By HortiNews Team

(news@hortinews.co.ke)

@hortinews1