The government is eyeing at least Sh14.3 billion in additional revenue in the proposed withholding tax of five percent on farm produce sold through co-operatives, a Business Daily tabulation shows. In the Medium-Term Revenue Strategy 2023 (MTRS)the government announced that in the three fiscal years from July to June 2027 it would apply a five percent withholding tax on all farm produce sold through co-operative societies. Farmer produce supplied to marketing boards will join winnings, qualifying interest, qualifying dividends and pensions, as among the few instances when withholding tax among the residents is a final tax. Sugarcane, sold by farmers directly to factories, would have earned the country Sh1.97 billion, milk (Sh1.8 billion), coffee (Sh1 billion) and wheat (Sh543 million). Robert Waruiru, a partner in charge of Tax & Regulatory at Ichiban Tax & Business Advisory, while agreeing that agriculture does not contribute its fair share of the tax revenue, reckoned that the new tax measure might be unfriendly.

Source: Daily Nation January 11, 2024 13:08 UTC