Tag Archives: food items

Lobbies increase pressure on Kenyan Parliament to review VAT Act

Parliament is expected to discuss amendments to the VAT Act, 2013 when it resumes sittings this month. Implementation of the VAT Act 2013 has seen the cost of living rise after manufacturers increased the price of basic commodities to recoup profit. This follows mounting pressure to review the Act. Tax on basic commodities consumed by low-income groups such as milk and processed food items has seen the cost living rise. “With an expansion in the VAT bracket, there could be a reduction in the rates when the next budget is presented,” said Kwame Owino, Chief Executive-Institute of Economic Affairs (IEA). He made these remarks yesterday during the 2014/15 per-budget hearings ending today. The process will involve drafting a memorandum, to be presented to Treasury. The new VAT law has been blamed for recent increase in the price of food items, especially those consumed by poor households. “The amended VAT Bill has gone through the first reading and will proceed to the second reading as soon as we come back from recess,” said John Mbadi, Suba MP, and sponsor of the amendments to the VAT Act 2013. The proposed law seeks to exempt infant milk, processed milk, mosquito and fishing nets, insecticides, fungicides and herbicides from VAT. Other goods and services to be exempted from taxation include vegetables, newspapers, journals, postal and water drilling services. If successful, the amendment will also exempt electricity supply to households and services offered by the Rural Electrification Authority. A raft of proposals is expected to reach treasury ahead of the 2014/15 budget, including critical sectors of the economy. Tax incentives “We need clarification on what is and is not vatable including infrastructure or commercial land,” said Robyn Emerson, chief executive-Kenya Property Developers Association. Developers are seeking for more tax incentives in order to support Vision 2030 goals. It is not only the real estate sector that is unhappy with the current tax regime. “We have seen county governments coming up with all manner of illegal levies, an indication of the need for direction on what tax is allowed at the county government level,” said Chryspin Afifu, official at Micro and Small enterprises Federation. The VAT Act 2013, which became operational on September 2, 2013, has put a 16 per cent tax on essential goods and services that had previously been zero-rated. These former zero-rated goods include milk, maize and wheat flour, bread, sanitary towels, medical dressing and plasters. Some of the zero-rated services that became taxable at 16 percent are electricity and water. By Jackson Okoth, The Standard

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Ubudehe: The programme that elevated Ndakaze out of poverty into a food supplier

Tite Ndekaze’s life’s journey is a tale of perseverance and hard work. Once a destitute, hope seemed to be a mirage for Ndekaze, a resident of Gisozi cell, Nemba sector, in Gakenke district Tite Ndekaze used to earn a living from tilling people’s land but thanks to Ubudehe, he now supplies food to two schools. The New Times/ Jean d’Amour Mbonyinshi. However, like the adage goes that it is not over until it is all over, Ndekaze’s fortune started unfolding when residents at a cell meeting  chose Ndekaze and a few other people as the most vulnerable persons who deserved  support to improve their social-economic status. “I was extremely poor and used to till people’s land for survival. I was later chosen by local residents as one of the poorest to be supported by Ubudehe programme. I was given Rwf45, 000 to start a small business of selling local sorghum beer,” Ndekaze says. Ndekaze  started his business in 2005. He used to make local sorghum beer twice a week for sale. “I used to supply jerrycans of beer to people who owned small pubs and made between Rwf 4,000 and 8,000 a week. I worked for a year and bought a cow. I applied manure in my little land and the agricultural produce started improving,” he says The cow produced a heifer which he sold at Rwf 100,000 and added on the savings he had made from selling sorghum beer to buy a small plot of land at Rwf150, 000, in 2007. With a cow, a business and a small plot of land  in a short period, local leaders appreciated Ndekaze’s efforts and recommended him for a bank loan. Working with banks Ndekaze could not get a big amount of money since the  business was still small...

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Sugarcane growing causing food insecurity

Commercial sugar cane growing is accelerating food insecurity in Eastern Uganda especially in the Busoga region, a study by Makerere University has revealed. The study done by the department of Forestry Bio-diversity and Tourism was aimed at establishing the prevalence of food insecurity and the impact of commercial sugarcane growing on household level food security in eastern Uganda. It indicated that commercial sugarcane growing although contributing to increased household income does not necessarily increase food adequacy among households. The authors of the study said that there are few varieties of food crops cultivated by sugarcane growing households and the households are also short of money to supplement what they grow. The study also noted that more people have taken to growing sugarcane on a commercial basis resulting in the conversion of different land-use types to monoculture sugarcane plantations. “Many households in the region especially around Kakira sugar factory rent out most of their land to rich out-growers and remain with a little patch which they also use for growing cane. The changes in land-use are motivated by commercial gains for improved household income than food production,” Dr. Edward Mwavu reiterated. However, Mwavu was fast to note that most men used the income acquired from commercial sugar growing to marry more women. “This might compromise the sustainable management of their agro-diversity as well as food production consequently exposing them to food insecurity and malnutrition,” he added. He made the presentation at Makerere University at the food science and Technology Conference Hall during the next generation of African academics dissemination conference. The study was done by Dr. Mwavu and two other academic doctors who included Vettes Kalema and Fred Bateganya. In their study, the authors found out that 87% of households in sugarcane growing areas reported not having adequate and nutritious foods to meet their family needs. The research also established that even among the commercial sugarcane growers, only 3 in every 10 households reported food adequacy and that nearly 21 in every 25 households reported sugarcane growing as the main source of food insecurity in the area. At district level, 44.2%) of households in Mayuge and 39.4% in Jinja attributed food insecurity to sugar cane growing. Households also reported employing various coping mechanisms that included offering labour in exchange for food (30.8%), borrow food (9.1%), rationing of food (7.2%) and at times stealing from their neighbours. It also emerged that male headed households were most insecure (62.5%) due to disregard for food in favour of other assets such as houses, bicycles and clothes. The study also revealed that those who owned land were most food insecure (68.0%) since they rented it out at about sh500, 000 per acre for four harvest seasons (about eight years) in a bid to make quick money subsequently remaining with little land for food. Food insecurity in the region, the study noted was also worsened by increasing trends in crop failures, family sizes, trade in food items in the villages, and declining food availability, land available for crop cultivation, and livestock numbers. The study involved 208 households in two commercial sugarcane growing districts of Jinja and Mayuge. By Innocent Anguyo,The New Times

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Sugarcane growing causing food insecurity – study

Commercial sugarcane growing is accelerating food insecurity in Eastern Uganda especially in the Busoga region, a study by Makerere University has revealed. The study shows that commercial sugarcane growing does not necessarily increase food adequacy. The study done by the department of Forestry Bio-diversity and Tourism was aimed at establishing the prevalence of food insecurity and the impact of commercial sugarcane growing on household level food security in eastern Uganda. It indicated that commercial sugarcane growing, although contributing to increased household income, does not necessarily increase food adequacy among households. The authors of the study said that there are few varieties of food crops cultivated by sugarcane growing households and the households are also short of money to supplement what they grow. ‘Marry more women’ More people have taken to growing sugarcane on a commercial basis, resulting in the conversion of different land-use types to monoculture sugarcane plantations. “Many households in the region especially around Kakira sugar factory rent out most of their land to rich out-growers and remain with a little patch which they also use for growing cane, said Dr. Edward Mwavu, who led the research team. He did the study with two other academic doctors, Vettes Kalema and Fred Bateganya. “The changes in land use are motivated by commercial gains for improved household income than food production,” said Mwavu. However, the researcher was sure to note that most men used the income acquired from commercial sugar growing to marry more women. “This might compromise the sustainable management of their agro-diversity as well as food production consequently exposing them to food insecurity and malnutrition.” He made the presentation recently at Makerere University at the Food Science and Technology Conference Hall during the Next Generation of African Academics Dissemination conference. Labour in exchange for food According to the study, 87% of households in sugarcane growing areas reported not having adequate and nutritious foods to meet their family needs. Even among the commercial sugarcane growers, only three in every 10 households reported food adequacy and that nearly 21 in every 25 households reported sugarcane growing as the main source of food insecurity in the area. At district level, 44.2% of households in Mayuge and 39.4% in Jinja attributed food insecurity to sugar cane growing. Households also reported employing various coping mechanisms that included offering labour in exchange for food (30.8%), borrow food (9.1%), rationing of food (7.2%) and at times stealing from their neighbours. It also emerged that male-headed households were most insecure (62.5%) due to disregard for food in favour of other assets such as houses, bicycles and clothes. Those who owned land, the researchers learnt, were most food insecure (68.0%) since they rented it out at about sh500, 000 per acre for four harvest seasons (about eight years) in a bid to make quick money, subsequently remaining with little land for food.

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Tanzania’s inflation rate seen dropping

The country’s Annual Average Inflation Rate for 2013 decreased tremendously reaching 7.9 per cent, down from the 16 per cent recorded in 2012 thanks to price decrease of food items particularly rice and other major cereals. Releasing the trend of the annual and ...

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Tanzania’s inflation down to 6.1pc

The inflation rate went to over two and half years’ low rate of 6.1 per cent last month, showing that the country’s economy is on the right track. National Bureau of Statistics (NBS) indicates that the inflation descended from 6.7 per cent ...

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More pain as VAT pushes up cost of living for Kenyans

The new Value Added Tax (VAT) Act increased the cost of living in September by a bigger margin. Inflation rate went up for the sixth consecutive month in September to 8.3 per cent from 6.67 per cent in August. This coupled with an increase in fuel prices mid September resulted in steep rise in the cost of living. Data by the Kenya National Bureau of Statistics (KNBS) shows that the cost of food and other general items went up 2.87 per cent in September. The price of books and magazines went up by 6.62 per cent. Other items that went up include electricity and cooking. Essential commodities The surge in prices of the items was largely due to the enactment of the VAT Act 2013, that imposed 16 per cent VAT on essential commodities that included processed milk. The new tax came into effect September 2. “The implementation of the VAT Act and seasonal factors affecting supply  of common food crops were the main causes of rise in the food index…,”  said  KNBSstatement. “In aggregate, rises outweighed falls in the average prices of various food items,” Notable is the price of milk that went up 22 per cent to retail at Sh57 per 500 millilitre, up from an average of Sh47 in August. Kenya Revenue Authority has since removed processed milk from the list of VAT exempt items

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