31 December 2013

Kenya: Buyers Shunning Kenya Tea Over High Taxes, Says Senator Obure

TEA buyers at the Mombasa auction are shunning Kenya Tea because of higher taxes on exports, Kisii Senator Chris Obure has said.

He said the move has compromised the company's competitiveness in the market.

Obure wants the government to waive the higher taxes.

He said most buyers prefer tea from Malawi, Burundi, Uganda and Rwanda because it is cheaper.

Speaking in Kisii town yesterday, Obure said Kenya's traditional markets of Pakistan, Afghanistan, UK and Egypt are searching alternative markets.

"The high taxes must be removed to safeguard small scale tea growers. It makes our tea less marketable despite its high quality," he said.

The former Agriculture minister said he will present a petition to Agriculture Cabinet Secretary Felix Koskei to abolish the one per cent ad valorem tax.

It was imposed on total custom value of tea at the auction in Mombasa.

Obure said other countries which sell their tea at Mombasa do not charge the ad valorem tax which replaced manufacturing cess.

"Tea farmers from Kisii through me will petition the national government through the ministry of Agriculture to reverse some of the taxes and policies that have led to the poor performance of Kenyan tea when the senate resumes sittings on February," said Obure.

He added: "The high taxes and policies formulated by government have had a terrible impact on farmers. We have capacity to reverse this and we must do it. The responsibility of the government is to protect the livelihood of its people and not to burden families."

Obure said the future of tea in the country is bleak and dismissed claims by KTDA that the low prices

are due to tea surplus and favourable weather.

"Let us face the facts that the business of tea has become costly to buyers who have turned to our neighbours's teas because of their friendly policies," he said.

The senator asked the counties to think of starting value addition, package its tea and sell it to buyers direct.

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