By Wycliffe Musalia

Coffee farmers, who now receive their payments directly, have received tax alerts, phone calls, and office summons as the Kenya Revenue Service has stepped up its enforcement of tax registration this year, according to a Kitale farmer, who is now filing annual tax returns.

Joseph Kariuki has been declaring tax from his agricultural transactions annually for the past two years, after he diversified into coffee farming.

“I started filing my annual returns two years ago, after the government introduced the direct settlement system (DSS) for coffee farmers. This was about a year after I ventured into coffee farming,” he said..

“According to the government, every farmer is supposed to pay tax… after your yearly sales you have to declare tax, but this has been effected mostly on coffee farmers. I have not heard of any maize farmer declaring tax… and (in coffee) no one can evade because they have our account details. Every coffee farmer is now paid through an account, so they even ask for account statements,” he said.

Kariuki, a resident of Kwanza sub-county, Kitale said the Kenya Revenue Authority (KRA) has “proposed 30% of the farmers’ profit as the yearly returns”. 

“The government requires every farmer to on-board on the iTax system and use the eTims to generate invoices for the purchase and payments of farm inputs. These receipts are useful during the annual returns as they show the expenses incurred by the farmer.”

“This became serious this year, where we received alerts that any transaction should be completed via eTims. These alerts are shared through SMS and sometimes the officers call us to inform us about our tax status. Ignorant or illiterate farmers who end up failing to declare the tax are summoned to the office, and KRA officers help them in declaring the tax, but they may end up being penalised.”

Joseph said declaring annual returns had helped him to keep clearer records.

“After I registered for iTax, I started doing my transactions like buying coffee farm inputs via eTims and at the end of every year, I used to declare my tax by entering the expenses and profit from my farm.”

“For example, at the end of this year, I must provide the eTims invoices I used to purchase the farm inputs when I am filing for this year’s return period. I will be declaring the January 2026-December 2026 tax in January 2027.”

The sums that farmers spend on inputs are deducted from profits and do not have tax paid on them.

Kariuki has only paid expenses so far, as he will be making his first harvest this year, after starting coffee farming about three years ago.

“I have not yet declared my tax for my coffee profit since this is the year I will be doing my first harvest. I am confident that my returns are good after an agronomist visited the farm and provided his feedback.”

“I also have confidence with the DSS, since we are able to get the right payment based on our coffee quality, as compared to the payments via co-operatives.”