The Kenya flower growers held a prolific meeting with the county Governors to address industry sustainability under devolution, in line with international, national and county requirements; ongoing EAC– EU EPA negotiations; business licensing and services over and above the specific issue of horticulture produce cess.
Led by the Chairman of the Council of Governors H. E. Isaac Ruto, the Governors welcomed the move by the Flower industry for engaging them in such imperative deliberations which are key in driving the Kenya’s economy. The Governors explicitly expressed their support in addressing and championing the flower industry’s concerns within the counties and with the National Government.
The KFC Chairman Mr. Richard Fox informed the forum on the grave risks that are facing the industry and Kenya at large if the EU- EAC Economic Partnership Agreement (EPA) is not signed by October 2014. Currently Kenya enjoys quota free and duty free export of flowers to EU and without the EPA, GSP tariffs will be applied. As a result, Kenya will not be able to compete on price and market share will be lost. Countries like Colombia, Tanzania, Uganda, Rwanda, Burundi and Ethiopia will continue to enjoy their duty free status, after October 1, 2014.
The meeting appreciated the difficulties emanating from the slow pace of the EAC – EU EPA negotiations where it was agreed that the Governors would work with the industry to encourage national government to expedite the process. H.E. Ruto assured the growers that he will follow up with the relevant Ministries for a way forward.
On the other hand, the tax burden on the industry urgently requires rationalization, harmonization and where necessary, expunge of some 45 taxes, levies and cess, to weed out multiple demands. There is also need to align demand to services and facilitate efficient and cost effective remittances, preferably by adopting “single window” concept. The governors expressed their support on harmonization process.
The Nyeri Governor H. E. Nderitu Gachagua who is also the Chairman of the Agriculture committee praised the industry for the high level of technology, education and operation adding that all the taxes, cess and levies will be looked at to develop a comprehensive position.
The KFC Chief Executive Mrs. Jane Ngige urged the County Governments to rationalize tax, permit and licence regime to encourage the development of more flower farms in Kenya, create jobs and alleviate poverty. She added that there is need to adopt a unified approach across all counties and maximize use of technology to facilitate accounting processes. Mrs. Ngige pressed on the need to recognize that the application of cess on export produce must take into account payments made both nationally and at county level for taxes, licences and permits.
The floricultural industry is under financial strain and additional charges will result in a reduction of contributions to community services and development and other non-mandatory contributions
It was agreed a working group comprising representatives of the growers, regulatory bodies, through the Governors’ Council be formed to review the AFFA Bill and to draw up amendments against the back drop of the functions and coordination between national and county government. The Bill is expected to be implemented in January 2014. This working Group will be put in place immediately and will focus on deadlines for both the EAC-EU EPA and implementations date of the AFFA Bill.
Preset in the meeting were HE James Ongwae Governor of Kisii, HE Mwangi wa Iria Governor of Muranga, HE Moses Akaranga Governor of Vihiga, Dr. Dabar Abdi Maliim representing the Chairman of the Transitional Authority, Deputy Governors, County Cabinet Secretaries, County Representatives, Directors of Agriculture from Nairobi, Nyandarua, Kiambu, Kajiado, Laikipia, Uasin Gishu, Nyamira, Busia Kisumu, Baringo, and Migori and flower growers.