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Taxes spoil the party for miraa exporters – Business Daily

A miraa farmer. FILE PHOTO | NMG
Miraa traders may appear to be making a fortune based on the overall export earnings since the opening of the Somalia market. However, numerous taxes and commission that they pay have dampened their earnings.
They are paying a commission of $4.5 (Sh635) for every kilogramme of miraa that is exported to Somalia. The money is collected by brokers at the Jomo Kenyatta International Airport before they are allowed to export.
The exporters are also paying $5 (Sh595) as airfreight and handling charges once the consignment is delivered to Mogadishu.
Nyambene Miraa Trade Association (Nyamita) Chairman Kimathi Munjuri said these deductions are chewing a significant portion of their profits.
“With all these deductions, the landing cost of miraa per kilogramme is $23 (Sh2737) while we sell the same at $25 (Sh2,975) as the best price meaning that we make a profit of Sh238 per kilogramme,” said Mr Munjuri.
Kenya had exported miraa worth Sh1 billion as of last week, since the resumption of the Somali market, on July 26, but traders say most of this money is eaten away through deductions.
Head of Miraa Pyrethrum and other Industrial Crops Felix Mutwiri said the government was still engaging with their counterparts in Somalia to address the protocol issues surrounding the exports of miraa to Somalia.
“We are still working on the protocols at the moment and there are things we don’t want to rush now that we have just resumed the market,” said Mr Mutwiri.
The traders want the government of Kenya and Somalia to convene a bilateral meeting and agree on the way forward on these deductions to save local farmers’ earnings.
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Joseph Muongi

Financial.co.ke was founded by Mr. Joseph Muongi Kamau. He holds a Master of Science in Finance, Bachelors of Science in Actuarial Science and a Certificate of proficiencty in insurance. He's also the lead financial consultant.