Inside Politics

EATTA urges State to zero-rate levy on tea

Wednesday, May 19th, 2021 00:00 |
A small scale tea farmer picks tea. Photo/PD/File

The East Africa Tea Trade Association (EATTA) wants the government to zero-rate Value Added Tax (VAT) on tea to cushion sector players and improve market competitiveness.

EATTA managing director Edward Mudibo says the sector continues to suffer due to unfair policies and taxes imposed adversely affecting the once lucrative sector.

“As we look budgeting matters, can the government this time round, consider zero-rating VAT on tea, because we export 95 per cent, and consume only 5 per cent.

If that is done then, in terms of prices, we shall be competitive compared to competitors regionally,” said Mudibo.

Competitors in the tea sector including Tanzania, Rwanda and Uganda have zero-rated VAT on tea.

“We now have 45 taxes and levies imposed on tea sector, from farm upwards, that in itself hits heavily on tea farmers.

So, instead they are looking for scapegoats, the government is overtaxing the sector and is now looking on who to blame, this are realities which should be solved,” said Mudibo.

National tea policy

With the International Tea Day slated for tommorrow, Mudibo says Kenya should adopt a comprehensive national tea policy that  will make the Kenyan market vibrant and eradicate obstacles.

“We lack this in Kenya but our neighboring countries which came to learn from us like Uganda and Rwanda have these policies which have made their sectors thrive,” says Mudibo.

Pakistan, Egypt, United Arab Emirates,united Kingdom and Sudan account for 75 per cent of the world market for Kenya’s tea produce thus the government asked to diversify markets from the golden product .

Lower prices have been attributed to an increase in volumes in the world market. 

More on Inside Politics