In Kenya, wheat millers calls for abolishment of tax to lower wheat flour prices

Published 2021년 1월 26일

Tridge summary

Kenyan wheat millers are seeking government intervention to reduce the burden of rising international wheat prices on consumers by proposing a return to zero-rated Value Added Tax (VAT) and the removal of a 10% duty on imported wheat. They argue that removing these fees would allow them to pass on the cost savings to consumers. Conversely, the government's recent change of bread products from zero-rated to exempt VAT status has denied manufacturers tax refunds. The millers have also expressed opposition to price controls on wheat products, advocating instead for tax relief to help consumers handle increasing commodity prices. The cost of bread, a staple affected by wheat prices, has seen a significant increase for the first time in four years.

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Original content

Wheat millers want the government to abolish duty on wheat and return it to zero-rated Value Added Tax Millers want wheat in order to cushion consumers against the grain's rising international prices. The government currently charges a 10 percent duty on imported wheat, with millers arguing that they will reduce the cost of wheat products by the same margin if the duty is removed. Kenya relies mainly on imports of wheat as the country does not produce enough to meet the annual demand. Effective this month, wheat products such as bread were moved from zero-rated to exempt VAT status, denying manufactures a tax refund. "If the import duty on the wheat is waived, this will go a long way in protecting the consumers. It is a major intervention that would work well as we do not have control over the rising cost of the commodity internationally," said the millers. Price controls Millers have also opposed any possible price control to tame the price of wheat products, saying that it will ...

Source: All Africa