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{
    "id": 1569850,
    "url": "https://info.mzalendo.com/api/v0.1/hansard/entries/1569850/?format=api",
    "text_counter": 62,
    "type": "speech",
    "speaker_name": "Hon. John Mbadi",
    "speaker_title": "The Cabinet Secretary for National Treasury and Economic Planning",
    "speaker": null,
    "content": "Packaging materials of all goods, including for tea also attract 16 per cent like any other. Imported packaging materials attract excise duty at the 25 per cent of the excise value. However, I will give the latest information about that. Various Government agencies charge fees or levies for services rendered to producers or manufacturers. In the Finance Bill of 2025, we have done two things- (i) We are proposing to exempt packaging materials used for tea and coffee from VAT. This exemption will only apply when packaging materials are imported or locally purchased with a recommendation from the Cabinet Secretary responsible for Agriculture, Livestock and Fisheries given that the use of these materials is not exclusive to coffee and tea packaging. This measure aims to protect these crucial sectors while also safeguarding government revenue. (ii) The second thing that we have done is under Custom Duty. On the custom side, Kenya was granted a stay of application of the EAC Common External Tariff on certain paper product to apply a higher duty rate of 25 to 35 to support domestic packaging materials. This negatively impacted exporters such as the tea industry. To address this, Kenya did not request an extension of the stay of application of the EAC Common External Tariff on these paper products during this year's EAC pre- budget consultations which I led in Arusha. Mr. Speaker, Sir, we have now gone back to the EAC Common External Tariff (CET) rates of 10 per cent like any other country in the East African region. (b) Regarding specific taxation measures that the Ministry is planning to implement in the Financial Year 2025/2026 to eliminate double taxation and other necessary taxes that overburden farmers and stakeholders in the tea industry, I wish to respond as follows- There is no double taxation in the tea subsector. As regards to specific tax measures for the coming financial year, we have already reviewed the submissions from the public. I think this answer should be amended to read that we have already considered. I have just read some of the steps that we are taking to reduce taxation which would support the tea subsector. I have mentioned the various incentives. I do not want to repeat. (c) On challenges faced in previous attempts to eliminate some of these taxes and levies on tea and the action taken to address them, I wish to respond as follows- Mr. Speaker, Sir, while there may be challenges affecting the tea subsector the national Government continues to extend numerous incentives to the subsector as outlined above. From consultation with the regulations on the tea subsector, various actions by various Government entities are ongoing to address the burden of the fees of levies in the tea subsector. Some of these measures include enactment of The Tea Act 2020 which reduced the management fee payable by tea farm factories from 2.5 per cent to 1.5 per cent, that is saving tea farmers approximately 1 billion annually from management fee to Kenya Tea Development Authority. There is the ad valorem levy of one per cent of the customs value of exported teas which was scrapped in 2016. The agricultural produce sales of 1per cent of green leaf was also scrapped in 2016, saving quite significant amount. Since July 2016, the Government replaced the 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."
}