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Taxation of farmers


The Income Tax Act defines farming as carrying on of farming operations and goes on to state that farming operations include livestock, agricultural and pastoral farming.

Therefore, subject to the Act requirements in certain sections any agricultural enterprise will qualify as a farming business and will enjoy certain benefits that will be mentioned below. Farmers operating as sole traders and not through registered companies have more benefits compared to those operating as companies. For instance, livestock and dryland farmers may have their income from their farm produce exempt from tax.

This exemption is applicable where the livestock is not more than 300 for cattle or 1800 for goats/sheep. If the farmer has both cattle and small stock, the combination shall be equal to 300 cattle such that 1 cow is equivalent to 6 goats/sheep. For example, if a farmer has 1200 goats and 100 cattle they qualify for the exemption.

For dryland farming exemption applies if the land being tilled is less than 100 hectares, dryland farming does not include horticulture. Another provision that is available to individual farmers and not available to companies is averaging of their farming income from sale of livestock or produce. A farmer can apply to the Commissioner General within 6 months after end of a tax year for averaging of their farming income for that tax year and 2 previous tax years.

The averaging percentage for livestock where the value of livestock sold is known is 60% of the gross farming income in each tax year while in other cases it may be agreed with the Commissioner General as reasonable. This significantly reduces the tax payable by individual farmers. Further to the above there are other tax benefits enjoyed by farmers that are not available to other taxpayers. These apply to any farmer regardless of the enterprise route taken.

These benefits include 100% deduction of capital expenditure related to farming such as farming implements, electrifying, roads construction, buildings related to farming operations like Chicken Houses, barns and such other farming capital expenditure. These are meant to encourage people to venture into farming as it provides food for the nation and contributes to development of our country and has potential to be the largest contributor to GDP in the country.

The 100% deduction also recognizes that farming is a capital intensive venture and farmers have to often spend regularly on replacements or maintenance of such implements or houses. Other businesses are only allowed to claim capital expenditure related to their businesses over a period of 4 to 10 years. Capital gains or losses from disposal of immoveable property for other businesses cannot be offset against other income but capital gains or losses from disposal of farm buildings can be offset against farming income.

This significantly contributes to reduction of farming income and unlike in other business ventures where such loss is only carried forward for 1 year then it falls off for farming the loss or income becomes part of the business/farming income and will only fall off after 5 years if not utilized. The Act provides that for livestock farmers they apply the standard values of livestock provided in the Act or use market value.

The current standard values for cattle are P430, P230 and P90 for fully grown animals, tollies and heifers and calves respectively. The values are outdated and may superficially increase one’s profits if adopted, it should be noted that where a farmer adopts these values for valuation of livestock they will have to use it in subsequent years. Therefore market value is encouraged at all times, for produce and other types of farming stock valuation is always at market value.

Apart from the normal corporate tax, livestock farmers attract a withholding tax of 4% every time they sell livestock for slaughter. For those who are taxable they will be able to claim this when submitting returns while those exempt it is a final tax for them.  Just like any business, record keeping is an important factor and for farmers to full enjoy these benefits and avoid chances of reversals of the benefits after they have been claimed, documents relating to income and all expenditure must be well maintained and kept over a period of 8 years. This is to allow the Commissioner to carry out any re-assessments

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Export Processing Zones: How to Get SEZA to Sizzle

23rd September 2020
Export Processing Zone (EPZ) factory in Kenya

In 2005, the Business & Economic Advisory Council (BEAC) pitched the idea of the establishment of Special Economic Zones (SEZs) to the Mogae Administration.

It took five years before the SEZ policy was formulated, another five years before the relevant law was enacted, and a full three years before the Special Economic Zones Authority (SEZA) became operational.

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Egypt Bagged Again

23rd September 2020

… courtesy of infiltration stratagem by Jehovah-Enlil’s clan

With the passing of Joshua’s generation, General Atiku, the promised peace and prosperity of a land flowing with milk and honey disappeared, giving way to chaos and confusion.

Maybe Joshua himself was to blame for this shambolic state of affairs. He had failed to mentor a successor in the manner Moses had mentored him. He had left the nation without a central government or a human head of state but as a confederacy of twelve independent tribes without any unifying force except their Anunnaki gods.

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23rd September 2020

If I say the word ‘robot’ to you,  I can guess what would immediately spring to mind –  a cute little Android or animal-like creature with human or pet animal characteristics and a ‘heart’, that is to say to say a battery, of gold, the sort we’ve all seen in various movies and  tv shows.  Think R2D2 or 3CPO in Star Wars, Wall-E in the movie of the same name,  Sonny in I Robot, loveable rogue Bender in Futurama,  Johnny 5 in Short Circuit…

Of course there are the evil ones too, the sort that want to rise up and eliminate us  inferior humans – Roy Batty in Blade Runner, Schwarzenegger’s T-800 in The Terminator,  Box in Logan’s Run,  Police robots in Elysium and  Otomo in Robocop.

And that’s to name but a few.  As a general rule of thumb, the closer the robot is to human form, the more dangerous it is and of course the ultimate threat in any Sci-Fi movie is that the robots will turn the tables and become the masters, not the mechanical slaves.  And whilst we are in reality a long way from robotic domination, there are an increasing number of examples of  robotics in the workplace.

ROBOT BLOODHOUNDS Sometimes by the time that one of us smells something the damage has already begun – the smell of burning rubber or even worse, the smell of deadly gas. Thank goodness for a robot capable of quickly detecting and analyzing a smell from our very own footprint.

A*Library Bot The A*Star (Singapore) developed library bot which when books are equipped with RFID location chips, can scan shelves quickly seeking out-of-place titles.  It manoeuvres with ease around corners, enhances the sorting and searching of books, and can self-navigate the library facility during non-open hours.

DRUG-COMPOUNDING ROBOT Automated medicine distribution system, connected to the hospital prescription system. It’s goal? To manipulate a large variety of objects (i.e.: drug vials, syringes, and IV bags) normally used in the manual process of drugs compounding to facilitate stronger standardisation, create higher levels of patient safety, and lower the risk of hospital staff exposed to toxic substances.

AUTOMOTIVE INDUSTRY ROBOTS Applications include screw-driving, assembling, painting, trimming/cutting, pouring hazardous substances, labelling, welding, handling, quality control applications as well as tasks that require extreme precision,

AGRICULTURAL ROBOTS Ecrobotix, a Swiss technology firm has a solar-controlled ‘bot that not only can identify weeds but thereafter can treat them. Naio Technologies based in southwestern France has developed a robot with the ability to weed, hoe, and assist during harvesting. Energid Technologies has developed a citrus picking system that retrieves one piece of fruit every 2-3 seconds and Spain-based Agrobot has taken the treachery out of strawberry picking. Meanwhile, Blue River Technology has developed the LettuceBot2 that attaches itself to a tractor to thin out lettuce fields as well as prevent herbicide-resistant weeds. And that’s only scratching the finely-tilled soil.

INDUSTRIAL FLOOR SCRUBBERS The Global Automatic Floor Scrubber Machine boasts a 1.6HP motor that offers 113″ water lift, 180 RPM and a coverage rate of 17,000 sq. ft. per hour

These examples all come from the aptly-named site    because while these functions are labour-saving and ripe for automation, the increasing use of artificial intelligence in the workplace will undoubtedly lead to increasing reliance on machines and a resulting swathe of human redundancies in a broad spectrum of industries and services.

This process has been greatly boosted by the global pandemic due to a combination of a workforce on furlough, whether by decree or by choice, and the obvious advantages of using virus-free machines – I don’t think computer viruses count!  For example, it was suggested recently that their use might have a beneficial effect in care homes for the elderly, solving short staffing issues and cheering up the old folks with the novelty of having their tea, coffee and medicines delivered by glorified model cars.  It’s a theory, at any rate.

Already, customers at the South-Korean  fast-food chain No Brand Burger can avoid any interaction with a human server during the pandemic.  The chain is using robots to take orders, prepare food and bring meals out to diners.  Customers order and pay via touchscreen, then their request is sent to the kitchen where a cooking machine heats up the buns and patties. When it’s ready, a robot ‘waiter’ brings out their takeout bag.   

‘This is the first time I’ve actually seen such robots, so they are really amazing and fun,’ Shin Hyun Soo, an office worker at No Brand in Seoul for the first time, told the AP. 

Human workers add toppings to the burgers and wrap them up in takeout bags before passing them over to yellow-and-black serving robots, which have been compared to Minions. 

Also in Korea, the Italian restaurant chain Mad for Garlic is using serving robots even for sit-down customers. Using 3D space mapping and other technology, the electronic ‘waiter,’ known as Aglio Kim, navigates between tables with up to five orders.  Mad for Garlic manager Lee Young-ho said kids especially like the robots, which can carry up to 66lbs in their trays.

These catering robots look nothing like their human counterparts – in fact they are nothing more than glorified food trolleys so using our thumb rule from the movies, mankind is safe from imminent takeover but clearly  Korean hospitality sector workers’ jobs are not.

And right there is the dichotomy – replacement by stealth.  Remote-controlled robotic waiters and waitresses don’t need to be paid, they don’t go on strike and they don’t spread disease so it’s a sure bet their army is already on the march.

But there may be more redundancies on the way as well.  Have you noticed how AI designers have an inability to use words of more than one syllable?  So ‘robot’ has become ‘bot’ and ‘android’ simply ‘droid?  Well, guys, if you continue to build machines ultimately smarter than yourselves you ‘rons  may find yourself surplus to requirements too – that’s ‘moron’ to us polysyllabic humans”!

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