Tax Update
Incentives for the agriculture sector

Incentives for the agriculture sector

There are a number of tax incentives for different sub-sectors in the agriculture sector, including animal breeding, irrigation, horticulture, fishing and poultry. Such incentives, provided on raw materials, machinery and equipment, are either in the main Customs Tariff or in specific Customs Procedures Codes (CPC) of the Customs and Exercise (Tariffs) Order.

Agricultural equipment and machinery are duty free in their own right.  As far as animal breeding is concerned, importers will be exempted from duty and VAT on importation of livestock meant for breeding.  This covers live bovine animals, live swine, sheep and goats as approved by the Principal Secretary in the Ministry of Agriculture, Irrigation and Water Development. This is to encourage diversification and promote animal husbandry. 

Investors in the irrigation sector will be exempted from import duty, import excise and VAT on the following goods for direct use in irrigation; PVC pipes, asbestos pipes/rubber seals, galvanized pipes, elbow, sprinklers, rainers, control valves, solvent cement, diesel engine ranging from 12kw-17kw with tubes, pressure gauges and nozzles imported by a farming entity. However, this incentive will be accessed upon prior recognition from the Principal Secretary in the Ministry of Agriculture, Irrigation and Water Development.

Investors in horticulture production will be exempted from paying duty, import excise and VAT when they import the following products and equipment; Seeds, Cuttings, Seed Netting Greenhouse Structure, Climate Control Equipment, One Generator Set, Water Pump Or Borehole, Flower Power Lights, Pump, Electrical Engines, Diesel Engine for Irrigation with Tubing, PVC Piping, Valves, Sprinkler System, Irrigation Filters/Nozzles, Pressure Regulators, New Refrigerated Trucks per five years, Cold Rooms, Strapping Materials and Clips, Metal Wires, Strings Elastic Bands, Processing Equipment, Bag Strikers, Laboratory Equipment, Chemical and Reagents, Soil Testing Kits, Moisture Testers, Graders, Chemicals Rose Cutter, Spray Equipment and Fumigation Equipment. However, this incentive applies to goods intended for export only and upon prior approval by the Minister of Industry and Trade.

Investors in the fishing industry can enjoy free import duty, import excise and import VAT on importation of machinery, plant, laboratory equipment and materials, aerators, pumps, blowers, diamond mesh, nets, measuring equipment, separators, specialized tanks and diffusers, boat engines and trawlers for deep sea fishing. However, the investor should be issued with a letter of recommendation from the Department of Fisheries in order to access this incentive.

In addition, fishing vessels, factory ships and other vessels for processing or preserving fishery products are import duty free but VAT is payable at 16.5 percent.  Investors in the agriculture sector will also not pay duty and VAT when they import fertilizers, pesticides, herbicides, ploughs, harrows, scarifers, cultivators, weeders, manure spreaders, fertilizer distributors and milking machinery. 

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