Miraa Levy: Ruto Introduces New Tax Starting July 1
The Miraa sub-sector has improved drastically in the last 12 months in particular after the re-opening of the Somalia Market in July 2022, a move believed to have led to the introduction of the levy.
admin
The government through the Agriculture and Food Authority (AFA) on Tuesday, June 27 introduced the Miraa Levy, a new tax which will be implemented from Saturday, July 1.
In a statement, AFA stated that the levy was introduced under Regulation 31 of Crops (Miraa) 2023, which was published on Wednesday, April 5, thus providing the regulatory framework for the Miraa sub-sector in Kenya.
The regulations contain various provisions that are geared towards trade facilitation through the registration and licensing of value chain players.
A farmer holding miraa crops. /KENYAN WALLSTREET
"Whereas the implementation of licensing procedures was rolled out immediately after the publication, the Implementation of the Miraa Levy was delayed as the development of enabling framework was underway. The e-platform has now been completed on the AFA's Integrated Management Information System.
"In this regard, the Authority hereby notifies the general public that the Miraa Levy provided for under Regulations 31 of Crops (Miraa) Regulations, 2023 shall take effect from 1st July 2023," read AFA's statement in part.
The authority added that stakeholders are required to adhere to the provisions of the Crops (Miraa) Regulations 2023 and ensure compliance.
The Miraa sub-sector has improved drastically in the last 12 months in particular after the re-opening of the Somalia Market in July 2022, a move believed to have led to the introduction of the levy.
Back in May, miraa farmers and traders lamented over what they termed as high taxes imposed on the cash crop by most counties, urging governors to treat miraa just like any other cash crop, adding that the high levies made it hard for them to do business.
They noted that only a few governors, including Meru's Kawira Mwangaza and Johnson Sakaja of Nairobi, adopted a friendly stance towards the stimulant, lessening levies.
Through the 300,000-member Miraa Growers and Traders Cooperative Union (MTCU) and Nyambene Miraa Traders Association (Nyamita), the miraa dependent community appealed to the Council of Governors, through chairperson and Kirinyaga governor Anne Waiguru, to prevail upon her colleagues to lower levies they said are exorbitant.
MTCU chairman Moses Lichoro stated that the Meru government charges Ksh2,000 for a 10-tonne lorry of miraa and Ksh1,000 for each of the pick-up vehicles but the destination counties were charging much higher.
“We want the taxes on miraa to be uniform. The amount we are paying in Meru should be the same amount other counties are charging, or even lower,” said Lichoro.
One vehicle carries miraa worth about Ksh2.5 million, while a lorry carries produce worth Ksh5 million. Optimally, up to 60 vehicles move the miraa on any given day, translating to about Ksh150 million daily in an industry worth up to Ksh40 billion every year.
Miraa is a highly perishable commodity and must reach consumers as fresh as possible. The stimulant, primarily produced in Meru, begins to lose its potency immediately after it is harvested and since it is transported as far as Somalia, time and speed are critical in this business.
Miraa drivers are thus known to ply major highways at breakneck speeds, motivated by the desire for money.
The miraa levy will join a segment of taxes to take effect in July 2023 following the assenting into law of the Finance Act 2023 by President William Ruto.
Among the taxes to take effect from July 1 include the 1.5 per cent salary deductions for the Housing Fund where employers will also match the employee's deductions, and the 16 per cent Value Added Tax (VAT) on fuel products.
