Kenya Flower Council Chief Executive Officer Jane Ngugi says there are over 40 different taxes and levies with flower farmers in the country paying about Sh170,000 to Sh600,000 per month on compliance.
Ngugi says the high cost of compliance is negatively affecting the industry and is requesting national regulators to harmonise and rationalise the license, permits and levies to increase efficiency and productivity in the sector.
“The amount of hours spent chasing the permits is hindering investments in the sector and we want the government to create a coordinated regulation mechanism in a cost efficient and effective manner,” she said.
She says that some of the levies are contradicting as most sectors have more than three compliance taxes and levies.
She says that there are also concerns about the Economic Partnerships Agreements between the European Union (EU) and the East African Community (EAC) that are yet to be concluded.
“Over the last four years the industry has seen stagnation… around 120,000 tonnes and this is one of the concerns being raised by the sector. It needs to be addressed in order to accelerate the growth,” she said.
“The business community around the flower industry both local and international are concerned if by October 2014 the agreements are not signed because what will happen if it’s not signed and ratified, Kenya will be taxed five to eight percent on their products going to the EU, this will also negatively affect the flower industry,” she said.
She also asked the government to look into the high cost production pointing at a rise in power costs by 13 percent in the last five years, fertilizer by 25 percent, chemicals by 55 percent, labour 65 percent and fuel by 16 percent that are negatively affecting the industry.
She was speaking at a national regulators roundtable in bid to streamline these taxes that included Kenya Revenue Authority, Kenya Bureau of Standards, Pest Control Produce Board among others.
Kenya is the lead exporter into the EU market with a share of 40 percent of flowers exported to Europe.
The country so far has about a hundred flower farms and close to 2,000 small scale farmers.