The value added tax (VAT) on fuel will not affect the prices of maize meal and wheat flour, the Cereal Millers Association of Kenya has revealed.
Millers had initially raised the price of maize meal on September 4, 2018 following the implementation of the 16 percent value added tax on petroleum products that took effect on September 1, 2018, so as to meet operational costs.
The 16 percent VAT tax was however halved to eight percent following President Uhuru Kenyatta’s decision to assent to the Finance Bill 2018 on September 21, 2018.
Since the new tax regime took effect there have been concerns and speculations that the price of commodities would remain as they were including that of maize meal. The fears were however downplayed by the millers association.
Speaking to members of the press at Sarova Stanley in Nairobi during the announcing of the forthcoming International Association of Operative Conference scheduled to be hosted in Nairobi next month; the millers association chairman Mohammed Islam Ali revealed that the governments’ decision to exempt wheat and maize flour from tax meant millers can no longer claim VAT refund from the Kenya Revenue Authority.
“The new changes to the eight percent VAT on fuel means millers can claim back input VAT. As such there is no need to increase the price of maize meal and wheat flour,” said Islam Ali.
Subsequently, the chairman also revealed that maize millers are owed Sh2.7 billion in arrears by the government for delivering maize in a subsidy programme that ended in December 2017.
“We are in talks with the government on how to get the payments nine months down the line. The harvesting season has begun in different regions of the country and millers will need money to buy more maize from farmers,” the CAM chair said.
The International Association of Operative Conference which is scheduled to run from October 22 to October 25 is Africa’s largest cereals summit. More than 100 exhibitors and 600 representatives from flour and cereal companies from across the globe are expected to attend.