Kenyans should brace themselves for higher food prices as the taxman and city authorities move to levy cess on cereals delivered to millers around the city.
The pinch is likely to be felt across the country, given that the city millers sell their food products in all corners of the country.
The Kenya Revenue Authority (KRA) said the market cess will be levied on cereals delivered at various millers’ premises in the capital city.
In a letter to the Cereal Millers Association (CMA), KRA Deputy Commissioner in charge of Nairobi County Revenue Division Annastaciah Githumba said collection of the levies would be undertaken by KRA officers.
The officers, according to the communique, should identifiable through branded reflector jackets and should be stationed outside the millers’ premises.
“Please take note that KRA and the Nairobi County government shall with effect from Wednesday, March 1, 2022 at 7am in the morning, commence collection of cess on cereals from produce being brought into your members’ premises,” said Ms Githumba in the letter dated February 25, 2022.
“For clarity purposes, the responsibility of paying the cess shall be on the owner of the products and not the miller, unless the miller is the owner,” adds the letter addressed to CMA chief executive officer Paloma Fernandes.
The millers are already grappling with inter-county barriers, as they have to pay cess in several counties as they transport grains to Nairobi.
Official records show that more than 90 per cent of the maize processed in Nairobi comes from the Rift Valley grain basket.
They also have to pay other charges levied by counties including distribution and branding permits which millers have to pay whenever they go to counties other than the ones where they are based.
Ms Githumba points out that the decision came after several engagements between KRA and the association late last year.
The association represents millers of wheat, maize and other cereals in Kenya.
CMA covers more than 10 million consumers of maize flour and over 30 million consumers of wheat flour through mills in Mombasa, Machakos, Mwingi, Kitui, Nairobi, Thika, Nakuru, Uasin Gishu, Kitale and Kisumu, among others.
“We, therefore, seek your cooperation in this regard to ensure that there is no disruption of business during the process,” she said.
It is one source of a county’s own revenue stream and can be levied on agricultural, fishing and forestry products as well as extractives such as quarry products.
