Flour prices won’t increase despite Finance Act taxes, says CMA

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Cereal Millers Association have reiterated that the prices of flour won't be affected by the Finance Act 2018 taxes
Cereal Millers Association have reiterated that the prices of flour won't be affected by the Finance Act 2018 taxes

Flour prices will not be affected by the VAT changes after the controversial Finance Bill 2018 was signed into law by President Uhuru Kenyatta on Friday last week. According to the Cereal Millers Association (CMA), before the signing off of the Finance Bill 2018 to law, the milling industry was exempted from the VAT hence they can’t shoulder the increased taxation burden. “It won’t affect the flour prices as they stand at the moment,” said the incoming chairperson Mr. Mohamed Islam Ali. He said at the moment there is no way the price of flour will increase because it’s back to a zero-rated value added tax and can only increase when there is a shortage of maize and the price goes up in the country.

Speaking in the same event the association’s outgoing Chairperson Mr. Nick Hutchinson forecast that the country this year expects low yields compared to previous years which he attributed to a late crops planting due to adverse weather conditions and poor grain quality. Mr. Hutchinson, who is also the chairperson of Unga limited, said the country’s consumption is increasing which has made countries across the world to move from the traditional consumption patterns e.g. Kenya depending largely on maize flour.

Moreover, Mr. Hutchinson revealed that Kenya will host the 29th annual International Association of Operatives Millers (IAOM) Mideast & Africa Conference & Expo from 22nd to 25th October 2018. The conference & expo which alternates its venues between Africa and Middle-East nations brings together more than 4000 members across the world who will showcase different technologies in the milling industry. He said in this year’s expo more than 600 delegates are expected to attend.