New Levies on Food Crops Imports and Exports.


We hope this message finds you well. We are writing to inform you about a significant development in the agricultural trade sector. The government has announced the operationalization of the food crops regulations, initially gazetted in 2019, targeting importers and exporters of cereals, legumes, pulses, roots, and tubers. Effective July 1, 2024, these food crops will now be subjected to new taxes as part of the government’s strategy to expand its revenue base and regulate the market.

New Levies on Food Crops Imports and Exports

The Agriculture and Food Authority (AFA) has issued a notice, dated May 28, detailing the imposition of levies starting from July 1, 2024. Under these new regulations, cereal imports will be taxed at a rate of 2.0% of their customs value, while exports will incur a 0.3% levy. Similarly, legumes and pulses will face a 2.0% customs charge for imports and a 0.3% levy on exports. For roots and tubers, the import tax is set at 1.0%, with a 0.3% tax on exports. These measures are outlined in the Third Schedule of the Crops (Food Crops) Regulations, 2019, which were developed collaboratively by the AFA, the Ministry of Agriculture, and relevant stakeholders to guide the promotion, development, and regulation of production, processing, and trade of these crops.

The implementation of these levies is expected to have significant implications for both local and international traders. Importers and exporters must now adjust their operations to accommodate these additional costs, which could influence prices and supply chains. The government argues that these levies are crucial for market regulation and the protection of local agriculture, aligning with President William Ruto's broader fiscal strategy.

Conclusion

In light of these changes, we advise all our clients engaged in the import and export of cereals, legumes, pulses, roots, and tubers to prepare for the upcoming levies. Compliance with these regulations is essential to ensure seamless operations and avoid any disruptions. At RWK & Associates, we are here to support you through this transition an other tax related matters. Please do not hesitate to contact us for further clarification or assistance in navigating these new regulatory requirements.

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