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{
    "id": 1569849,
    "url": "https://info.mzalendo.com/api/v0.1/hansard/entries/1569849/?format=api",
    "text_counter": 61,
    "type": "speech",
    "speaker_name": "Hon. John Mbadi",
    "speaker_title": "The Cabinet Secretary for National Treasury and Economic Planning",
    "speaker": null,
    "content": "Mr. Speaker, Sir, these are ongoing reforms. I have also indicated how much tea has been contributing to our economy. For export earnings, I have already also explained how much we are getting in terms of export earning contributed by tea subsector. In the Financial Year 2025/2026, as outlined in our Budget Policy Statement (BPS) for 2025, the Government will be executing the following key interventions to further boost the tea subsector, and that is already enumerated: Value addition, market development and farmer support. These are explanations about what the Government is doing on infrastructure, including putting up infrastructure, especially such as in Dongo Kundu and special economic zone and constructing research and development facilities for tea. So, coming back to the question where I was asked to explain or provide a breakdown of all taxes and levies imposed throughout the entire tea supply chain, I respond as follows - tea subsector benefits from numerous tax incentives. In fact, that supports its growth and sustainability, making it a thriving subsector. This subsector is one of the subsectors that is cushioned and enjoying incentives as opposed to getting to a sector that is subjected to additional taxes. I have just explained some of the exemptions or tax incentives, especially on Value Added Tax (VAT). There is no VAT charged at the farming level for tea on inputs such as fertilizers. Agricultural services and farming tractors are exempt from VAT. I have also indicated that imported agricultural machinery used for land preparation are duty-free, but only attract VAT at 16 per cent. Railway Development Levy is at 2 per cent while Import Declaration Fee (IDF) is at 2.5 per cent of the customs value. For tea processing, 100 per cent investment deduction by tea factories located outside the cities of Nairobi, Mombasa or Kisumu are also exempt. I think we should now add Eldoret and Nakuru, although there is also thinking that we should remove this requirement at all of only cities, because cities are becoming many and again, we feel it is unfair to the cities. Machinery used for tea processing is currently duty-free under East African Community (EAC), common tariff, external tariff. Income of an entity including tea processing factories are charged corporation tax at the rate of 30 per cent like any other factory. Processed tea sold in the domestic market is objected to VAT at 16 percent. Transportation services on unprocessed tea are exempt from VAT. Unprocessed green tea is VAT exempt and locally purchased tea for value addition before exploitation is zero rated. Marketing and distribution: Under marketing, tea brokerage services enjoy exemption from VAT. Locally purchased tea for value addition before exportation is zero rated. Mr. Speaker, Sir, manufacturers of packaging materials locally for use by exporters of locally produced goods such as tea and horticultural products import raw materials duty-free under the EAC duty remission scheme--- The electronic version of the Senate Hansard Report is for information purposesonly. A certified version of this Report can be obtained from the Director, Hansard and AudioServices, Senate."
}