The Ministry of Agriculture and Livestock Development on Tuesday hosted a high-level forum in Nairobi where agricultural stakeholders presented a value chain-based memorandum to the National Treasury and the Council of Governors, outlining major tax and policy concerns affecting the sector.
The forum, chaired by Agriculture Cabinet Secretary Mutahi Kagwe, brought together representatives from the National Treasury, the Council of Governors (COG), the Kenya Revenue Authority, and sector regulators.
Farmer groups, manufacturers and private-sector agricultural associations were also present.
Stakeholders raised a series of urgent concerns, including VAT regimes, regulatory levies, and trade barriers that they say are hampering competitiveness.
One of the central issues was the inconsistent VAT framework on agricultural inputs and produce. Stakeholders called for long-term clarity.
“We need a stable VAT regime where products are either VAT-exempt or zero-rated for 10 years,” the memorandum stated.
They also highlighted the burden of pending VAT refunds.
According to the document, the government owes the private sector more than Sh150 billion, a backlog that has forced companies to scale down or shut operations.
Stakeholders urged the government to clear refunds through “a special bond issuance.”
Concerns were also raised about high duties on packaging materials, with some value chains paying up to 60% in excise and related taxes.
“The duty is pushing up domestic prices and making Kenyan exports less competitive,” they said.
Farmers further asked KRA to extend the grace period for eTIMS compliance, warning the requirement risks driving them into informal markets.
“This push could degrade value chains and expose farmers to exploitation,” the memorandum read.
Stakeholders also called for urgent bilateral trade negotiations.
They cited India’s 30% tariff on certain Kenyan exports while similar products from Uganda and Tanzania enter duty-free.
“Kenyan exports are being edged out of the market,” they said.
Other concerns included the introduction of a 2% land rate on farmland, cross-county cess charges contrary to the Constitution, and duplicative regulatory levies.
National Treasury Principal Secretary Chris Kiptoo assured stakeholders that their concerns would guide future tax reviews.
“The government will incorporate the issues raised into the budget-making process,” he said.
“We are considering a one-off payment of VAT refunds alongside pending bills to ensure industries do not close down.”
Kiptoo added that regulators would be summoned for a joint review. “The issue is not just the levies but the services regulators deliver,” he said.
COG chairman and Wajir governor Ahmed Abdullahi acknowledged county-level challenges but condemned illegal cross-county cess.
“Cess should not be collected outside the county of origin,” he said.
He added that the land rate proposal would be reviewed by the COG agriculture committee.
CS Kagwe challenged institutions to embrace innovation.
“We cannot get more land; land is finite,” he said.
“Through technology such as AI, we can increase crop production per acre. We must innovate.”
He also warned against unethical export practices.
“They damage the country’s image and competitiveness,” he said.
The memorandum was presented by a wide coalition of sector groups, including ASNET, FPEAK, Kenya Tea Development Agency, Cereal Growers Association, Kenya Flower Council, the Dairy Producers Association, and various livestock, horticulture, and nuts associations.
The ministry pledged to escalate outstanding issues to the Cabinet.
