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Bungoma Governor Kenneth Lusaka has cautioned that recent tax measures risk crippling Kenyaโs agricultural sector, calling for urgent reforms to protect farmers and restore competitiveness.
Speaking at a breakfast meeting between agricultural value-chain players and the National Treasury in Nairobi, Lusaka said rising VAT charges, import duties and fragmented county cesses have sharply increased production costs ,from fertilizer and seedlings to packaging and cold-chain equipment.
โWe cannot overtax agriculture and expect growth. These policies are squeezing farmers, weakening cooperatives and undermining our export competitiveness,โ he said.
He warned that the proposed 5% withholding tax on produce sold through cooperatives would severely affect the majority of Kenyans who rely on the cooperative system for marketing and extension support.
Lusaka noted that despite agriculture contributing up to 22% of GDP and employing more than 40% of Kenyans, the sector receives only 3% of public spending, far below regional commitments.
He called for a time-bound tax relief package on key inputs, a waiver on import duties for processing and cold-chain equipment, harmonization of county levies, and the creation of a National Agricultural Value-Chain Development Fund.
โFiscal consolidation must be growth-friendly. Counties are ready to work with Treasury to unlock investment, protect farmer livelihoods and restore competitiveness,โ he said.
