The National Treasury is keen on clearing Ksh 150 billion in Value Added Tax (VAT) refunds owed to manufacturers in a bid to make agriculture sector more competitive.
Speaking during the roundtable with stakeholders in the agriculture sector value chain organized by the Ministry of Agriculture and Livestock Development, Treasury Principal Secretary Dr Chris Kiptoo said the the government is committed to paying the VAT backlogs as well as pending bills owed to various suppliers.
“As we work on the harmonization of tax, we are also considering a one-off payment of VAT refunds alongside pending bills to ensure that industries do not close down. In regard to the levies by different regulators, we have been pushing regulators and SAGAs to become self-sufficient,” said Dr. Kiptoo.
According to stakeholders, the unpaid refunds have contributed to closure of various enterprises in the country while some have been forced to scale down their operations due to lack of working capital.
Treasury was similarly urged to harmonize VAT on agricultural produce and inputs and implement a more predictable VAT regime where products are either exempted or zero-rated for a period of 10 years to enable long-term business planning and reduce piling refund claims.
