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Kenyan Flower farmers seek Sh300m state refund after EU export duty

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Monday, 12 January 2015

Kenyan Flower farmers seek Sh300m state refund after EU export duty

Kenyan flower exporters are negotiating with the government to be refunded taxes and levies paid in European markets between October 1 and December 25. The Kenya Flower Council estimates that its members were losing Sh100 million monthly, meaning the cumulative duties paid could be up to Sh300 million. Jane Ngige, KFC chief executive, said yesterday that ongoing negotiations with the state for compensation will resume shortly after interruption by Christmas festivities. “We are hoping for full compensation, but then again, issues involving money are sensitive to the government and we can only await the outcome of the discussions,” Ngige said on phone.

Cut flower producers, she said, are “very busy” at the moment, ahead of next month’s Valentine’s high season when they hope to “regain and expand our market share” in the EU. Export earnings from the horticultural industry added to Sh62.37 billion in the nine months to September, a 4.3 per cent increase from the Sh59.79 billion raked in over a similar period in the previous year, according to data from directorate of horticulture. The horticultural industry was hard hit by export duty to the lucrative 28-country European Union market, which ranged between 8.5 per cent and 20 per cent following failure by the East African Community to conclude negotiations for a new economic partnership agreement before the September 30 deadline. The deal was finally signed on October 14 but Kenya was reinstated to the preferential duty-free, quota-free regime on December 25 after the EU agreed to fast-track its case.