Last year, a CNN report hailed Kenya’s flowers as some of the best in the world, describing with relish the “boldest shades of roses, from a glossy red to a bright yellow and even a vivid pink”. - @dailynation
@dailynation The report attributed country’s flower power to Kenya’s sunny climate, which enables high-quality blossoms to be grown all year round without the need for expensive greenhouses, and the country’s “excellent transport links to Europe, and from there, the rest of the world”.
@dailynation Today, the industry is in turmoil, threatening to tear off the lustre that brought the country Sh113B in 2018 and indirectly employed more than 500,000 people.
@dailynation Last week, Finlays Kenya said it would close its two flower farms in Kericho County by Christmas, citing stiff competition and the increasing cost of doing business.
@dailynation At the centre of the industry woes is delayed reimbursement of value-added tax, which stands at Sh6B, having accumulated since 2013.
@dailynation One company is owed as much as Sh800M in VAT reimbursements. We cannot expand in this kind of environment. - Kenya Flower Council chief executive Clement Tulezi
@dailynation Devolution has also squeezed the firms between the county and national government administration, which are imposing multiple regulations, taxes and fees.
@dailynation A flower grower now pays up to 42 levies. Mr Tulezi said, warning that the coming into force of the proposed 2019 Crops (Food Crops) Regulations and the 2019 Crops (Horticulture Crops) Regulations would further burden the industry with more taxes and bureaucratic gridlock.
@dailynation The draft rules seek to introduce a movement tax, which industry players oppose as there are already similar levies affecting agricultural products. They include cess tax imposed by devolved govts and branding, outdoor advertising, distribution, offloading and landing taxes.
@dailynation The overlapping roles and the several charges raise the cost of doing business and are an administrative burden on the industry. The council has challenged some of the levies in courts in Meru, Kajiado and Kiambu counties.
@dailynation The government also imposes a 2.5% Free on Board cess on growers from which it makes approximately Sh650M every year. Industry players say any more levies would see more exits, leading to Kenya’s unemployment crisis growing worse.
@dailynation Naivasha is the bedrock of the industry in the country and critics say the deplorable state of the 36 kilometre Moi South Lake Road, which leads to most of the farms, is symptomatic of neglect by the government.
@dailynation Industry players want the government to start negotiations with Britain, which accounts for about Sh20B worth of Kenyan flower sales, before the Brexit deadline. They add that the consequences would be devastating if the UK crashes out without a deal.
@dailynation GoK has made horticulture business a taxes cash cow, withholds VAT refunds and creating more bureaucracy that will see flower farms shut down starting with Finlays sending home 2000 employees in December. bit.ly/31XUstP
