Double taxation a hurdle for the flower sector

Written By: Ruth Mutegi
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Double taxation at the County and national levels is posing a major challenge for the flower industry with the levying of horticultural cess a serious concern.

According to the Kenya Flower Council, while the industry has been performing relatively well, there have been emerging issues on payment of horticultural cess in major flower growing areas which is hurting flower farms.

Experts project that flower sales earned Kenya 71 billion shillings in 2017, which is the highest figure in the last 7 years.

Kenya’s flower sector has been performing fairly well in the international market, attaining the lead supplier status to the EU against competitors and accounting for about 38 percent of the world flower trade.

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In 2016, Kenya exported 133,658 tonnes of flowers, earning 70.8 billion shillings, a remarkable growth since 2010 when the country earned 35.5 billion shillings from the rosy sub sector after exporting about 120,000 tonnes.

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While the country has been experiencing dry weather patterns, Kenya Flower Council CEO Jane Ngigi says the sub sector has been thriving since the warm conditions are favorable for flower production.

However, due to transition to the devolved governments, issues of double taxation have emerged with flower farms forced to pay cess at both the county and national level. Kenya Flower Council CEO Jane Ngigi says.

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The council has been working on an amicable solution to the matter both in and out of court.

The council also expects earnings in the sector to increase by 2 billion shillings this year, up from the Ksh 71 billion earned in 2017.

Issues of erratic power supply have also been a concern which flower farms say has increased the cost of production. The Kenya Flower Council is however encouraging industry players to invest in renewable energy to substitute power supply. Ngingi adds.

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Roses are still the most popular flowers from Kenya, accounting for about 60 percent of the overall flower exportsOther flowers include carnations, and lilies

Japan and Australia are the leading destinations for Kenya’s flowers, with the council banking on the introduction of direct flights to the United States later in the year to boost flower exports to America.

Locally, players in the industry are upbeat about increased sales on Valentine’s Day, which single handedly accounts for about 30 percent of total sales in the sector.

 

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