President Ruto now goes for farmers in new tax measures

President William Ruto's administration now plans to go for more taxes, this time round targeting farmers, in what seems to be new measures to raise more revenue.

A medium-term revenue strategy posted by Treasury Cabinet Secretary Prof. Njuguna Ndung'u shows that the government now wants every farmer delivering their produce to the markets to pay Ksh.5 for every Ksh.100 obtained from sales. 

CS Ndung’u, in his medium-term revenue strategy, says the agricultural sector is undertaxed.

The document says, “The Kenyan economy is dependent on the agricultural sector contributing an average of 21.2% of the GDP and the highest employer compared to other sectors.”

Treasury acknowledges that the sector has unique challenges, thereby making taxation difficult.

The sector is highly informal, cash-based and characterized by the notion that the sector should not be taxed. Treasury now says it will lay down mechanisms to raise maximum taxes from Kenyan farms.

Should the proposals see the light of day, the government will introduce a final withholding agricultural produce tax at a rate not more than 5% of the value of the produce delivered to the cooperatives or other organized groups.

This means that in every Ksh.100 a farmer gets in the market Ksh.5 will belong to the government.

To achieve the maximum taxes, the government will intensify taxpayer education to ensure that taxpayers understand their role in nation-building and the need to pay taxes.

The Treasury proposals will be subjected to public participation through Parliament.