Western leaders reject e-TIMS in sugarcane sector
Kakamega Governor Fernandes Barasa.
What you need to know:
- KRA wants all sugarcane farmers to register on its tax payment platform e-TIMS from April 1, 2024 failure to which they will not be able to sell their crop
- Members of parliament, governors and senators in Western are demanding that the new tax law be suspended claiming that the directive will hurt sugarcane farmers
- Butali Sugar factory, in Kabras, Kakamega County, has asked its farmers to comply with the new tax regulation
Political leaders in Western region have rejected the new tax and payment changes in the sugar sector that require farmers to present e-TIMS invoice for every cane delivered to factories for crushing before they are paid.
The Kenya Revenue Authority (KRA) wants all sugarcane farmers to register on its tax payment platform e-TIMS from April 1, 2024 failure to which they will not be able to sell their crop.
However, members of parliament, governors and senators in Western are demanding that the new tax law be suspended claiming that the directive will hurt sugarcane farmers, most of whom are not techno-savvy and do not own smartphones.
They also want the cane pricing committee to review the decision to reduce the price of cane per tonne and increase the buying price to above Sh6,050.
Kakamega County governor Fernandes Barasa said they will not sit back and watch millers pay cane farmers less than Sh6,050 per tonne of cane delivered to the factories for crushing.
“We are surprised that when the cost of essential commodities shoots up, the cane pricing committee is reducing the price per tonne of cane. We want the Agriculture and Food Authority to intervene and have the prices reviewed upwards,” said Mr Barasa.
The cane pricing committee considers prevailing sugar market sales prices and ex-factory rates to determine the cost of sugarcane per tonne.
The move to tax sugarcane farmers comes at a time when the government has shown strong interest in implementing new tax increases.
The leaders who spoke in Matungu Constituency asked National Assembly Speaker Moses Wetang’ula to convene a special sitting so that MPs can revise the tax changes to cushion sugarcane farmers from increased taxes.
Likuyani MP Innocent Mugabe, Titus Khamala (Lurambi), Emmanuel Wangwe (Navakholo), Nabii Nabwera (Lugari), Peter Nabulindo (Matungu), Johnson Naicca (Mumias West) and Bungoma Senator Wafula Wakoli asked the government to be strategic when introducing new policies so that it does not cause tension among Kenyans amid the high cost of living.
“We shall not allow sugarcane farmers to be taxed through the e-TIMS system introduced by KRA. We want a special sitting convened so that we remove the new tax requirement from the Finance Act,” said Mr Mugabe.
Some millers are reported to be directing farmers to enlist on the KRA’s e-TIMS platform before they can harvest their cane and get paid.
Butali Sugar factory, in Kabras, Kakamega County, has asked its farmers to comply with the new tax regulation.
A circular sent to sugarcane farmers from the factory indicated that each farmer was required to produce an e-TIMS invoice for every cane delivered to the factory.
“To all our respected farmers, with effect from April 1, 2024, we will be unable to process and pay you for cane delivered unless you, as our farmers, provide us with a valid electronic tax invoice,” reads part of the circular.
Butali management said they had held several meetings with KRA officials to have a simplified way of taxing the farmers but they had failed to reach an amicable solution.
“We are in constant discussions with KRA and hopefully, we shall agree on a simplified way to resolve the matter in the coming days,” read another part of the circular.
Mr Nabwera said the e-TIMS system was introduced on avocado farmers but their leaders resisted the move and it was stopped.
“If it was removed from avocado farmers in the Central region, we also want the application of the new tax system stopped by sugarcane farmers,” said Mr Nabwera.
“When the taxman imposed the taxes on avocado farmers, they made noise and the Deputy President Rigathi Gachagua convened a meeting that helped remove the tax requirement. We task Mr Wetang’ula to help out sugarcane farmers from the claws of the new taxes,” he added.
Mr Khamala said the government should provide an enabling environment for farmers to venture into profitable farming.
“Most farmers don’t have smart phones and are not familiar with the new electronic invoicing system yet they are required to have the KRA pins and SSD codes. Is this system meant to discourage them from farming sugarcane?” questioned Mr Khamala.
KRA is in the process of integrating its systems with Telcos, commercial banks, and the Central Bank of Kenya (CBK) to gain a comprehensive perspective on all traders’ transactions.
Kakamega deputy governor Ayub Savula accused the MPs of failing to use their constitutional powers to cushion Kenyans from high taxes and only to pretend to care for Kenyans during public gatherings.
"You have the power to determine what becomes law. But when in parliament, you keep quiet or abscond sittings to discuss such debates only to come out and start shouting in public. You are not honest," Mr Savula told the MPs.
