Posted on September, 26, 2018 at 10:29 am
By AGATHA NGOTHO and KELVIN KIRU
Millers have said they will not raise the price of maize floor despite the slapping of an eight per cent tax on petroleum products.
The Cereals Millers Association said the tax will not affect unga priced as earlier anticipated.
The millers chairman, Mohammed Islam said the National Treasury's decision to place wheat and maize flour under goods exempt from tax from zero rate means millers can no longer claim VAT refund from the Kenya Revenue Authority.
“But the new changes to the eight per cent VAT on fuel now means that millers can claim back input VAT and we do not see the need to increase the prices of unga,” he said during the announcement of the forthcoming international millers conference set for next month.
A two-kilo packet of maize flour is currently retailing at at between Sh85 to Sh92.
However small scale traders in estate shops have taken advantage of the VAT increase and and are now selling the two kilograme packet at between Sh95 and Sh97 despite government’s warning that traders should not take advantage of the tax to fleece customers.
Millers had on September 4 indicated that the increase in the cost of production would push up flour prices.
They said that the VAT changes on the status for processed wheat and maize flour and VAT on petroleum products, could leave millers with little room to absorb the additional costs without jeopardising quality and the sustainability of operations.
United Grain Millers Association chairman, Peter Kuguru said small scale millers will increase the price of maize four shillings.
He said millers would pass half of the eight per cent levy to consumers and absorb the balance.
Nick Hutchison said the international forum will host more than 100 exhibitors from Middle East, Africa, Europe, North America, Australia & Asia. More than 600 delegates from flour millers, cereal grain processors, seed processors and allied trade representatives and companies are expected to participate.
Islam said millers are yet to be paid Sh2.3 billion for the maize subsidy programme that ended in December 2017.
“We are in talks with the government on how to get the payments nine months down the line. The harvesting season has already started in some areas and the millers will need the money to buy more maize from the farmers,” he said.
Source: MediaMax Network