Leaders warn tax on ‘Keg’ beer will hurt farmers: The Standard

Business
State seeks to amend the Excise Duty (Remission of Excise Duty) Regulations 2017

Tharaka Nithi County leaders have expressed concerns over a Budget proposal to increase tax on beer made from sorghum, cassava or millet. The government seeks to amend the Excise Duty (Remission of Excise Duty) Regulations 2017, by introducing the proposed Excise Duty (Remission of Duty) (Amendment) Regulations 2020 under which tax levied on beer made from sorghum, such as Senator Keg, goes up. Tharaka MP Gitonga Murugara and his Chuka/Igambang’ombe counterpart Patrick Munene said this will have adverse effects on farmers in the county where sorghum and millet are predominantly grown. “As a representative of farmers in Tharaka, where sorghum is extensively and widely grown and is one of the biggest cash crops, I have taken the earliest opportunity to object and oppose the passing of these regulations,” said Murugara.

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Ordinary consumers He said he had written to the National Treasury to voice his concerns about the fate of sorghum farmers and was seeking support from MPs in sorghum growing areas to oppose the proposals. The sorghum producing regions include Nyanza and Western where farmers are being recruited to grow the crop for a local brewer. Delegations of farmers from the areas have regularly been brought to Tharaka Nithi to learn the experiences of cultivating for the brewer. Muragara said increasing tax on beer made from sorghum also means the price of sorghum will plunge as that of Senator Keg beer goes up. The trickle down effect, he added, will be that the production of sorghum will drop as farmers will have no incentive to grow it, while the price of lower market Keg beer will go up to a level that ordinary consumers will not afford.

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“These consumers could eventually turn to locally brewed, cheap and affordable illicit brews contrary to the government policy,” said the lawmaker. Munene said if these regulations are implemented, everyone becomes a loser, including the sorghum growers, the manufacturers of Keg beer and the government, which will not get the revenue.