William Ruto's Govt To Tax Farmers 5% For Every KSh 100 Made From Sale Of Their Farm Produce

• Treasury Cabinet Secretary Njuguna Ndung'u said the agriculture sector was undertaxed, yet it is the highest employer
• In a medium-term tax strategy, Ndung'u has proposed the introduction of a withholding tax on all farm produce
• If Members of Parliament approve the proposal, farmers will pay KSh 5 for every KSh 100 they make

Amos Khaemba, a journalist at TUKO.co.ke, brings over three years of experience covering politics and current affairs in Kenya.

Nairobi - President Willam Ruto's administration is set to introduce new taxes targeting all Kenyan farmers to raise more revenue.

Citizen TV reported that the Kenya Kwanza administration now wants every farmer to pay a withholding agricultural produce tax at a rate not more than 5% of the value of the produce delivered to the market.

Why CS Ndung'u wants the agriculture sector taxed

Treasury Cabinet Secretary Njuguna Ndung'u, in a medium-term revenue strategy, wants every farmer delivering their produce to the markets to pay KSh 5 for every KSh 100 obtained from sales.

According to CS Ndung'u, the agricultural sector is undertaxed, yet it's the highest employer compared to other sectors.

“The Kenyan economy is dependent on the agricultural sector, contributing an average of 21.2% of the GDP and the highest employer compared to other sectors,” the document by Ndung'u says.

The Treasury CS acknowledged that the agriculture sector has unique challenges, such as being highly informal, which might make taxation difficult.

However, the CS said the government will put in place proper mechanisms to raise maximum taxes from Kenyan farms.

The CS said the Kenya Kwanza administration will intensify taxpayer education to ensure taxpayers understand their role in nation-building and the need to pay taxes.

Why does William Ruto support more taxes?

Meanwhile, President Ruto emphasised that taxation is the only way to lift Kenya from its debt burden and foster economic stability.

Ruto underscored the importance of generating revenue to fund essential government programmes and services, despite stiff opposition from Kenyans who feel overtaxed.

Speaking during a burial ceremony in Njabini, Nyandarua county, on Tuesday, January 2, the president defended the introduction of a raft of taxes under the Finance Act 2023, arguing that taxes helped nations progress.

He explained that taxes were crucial in facilitating debt repayment, noting that he wouldn't allow the country to default on its obligations.

"Many nations have been destroyed by debt, but there is no single nation that has been destroyed by taxes. In fact, many progressives countries have been built by taxes and that is where we need to go," he said.