Kenyan seed companies have blamed the influx of vegetables from Tanzania on the cheap cost of production in the neighboring country, as it does not charge the 16 per cent duty on tomatoes and onion seeds. This, in turn, seems to be having a negative impact on the Sh15 billion industry.
The Seed Trade Association of Kenya (STAK) is an umbrella body bringing together all the seed processors in the country. Its spokespeople say the VAT levied on vegetable seeds locally has made Kenya’s produce uncompetitive in the market.
STAK chairman Humphrey Kiruaye says onions, tomatoes and other vegetables from Tanzania that have become common in Kenya are way cheaper when compared with what is produced locally: “There are a lot of vegetables coming here in Kenya from Tanzania and that is because our product is uncompetitive in the market owing to the 16 per cent duty levied on seed.”
Tanzania does not charge VAT on vegetable seeds and most of the farm inputs such as chemicals, make the cost of production in the country much cheaper. Also, under the East African Community protocol, Tanzania is allowed to export goods to Kenya duty-free.
Source: businessdailyafrica.com