Budget Proposes VAT Reforms to Boost Local Agro-Processing and Manufacturing

• The 2026/2027 budget centers on tax reforms to modernize tax administration, improve revenue collection, and support economic growth.
• It proposes VAT exemptions to boost local agro-processing, including packaging materials for dairy products and an extra-year extension for locally produced edible oil made from local seeds until 30 June 2027.
• A new VAT exemption would apply to clothes and garments made from locally grown cotton to encourage domestic value addition, though implementation may be difficult when local and imported cotton are mixed.
• The budget also plans to remove VAT exemption on imported fishing nets while exempting polyester fibres used to make nets locally, aiming to promote local manufacturing and job creation.

Source: assets.kpmg.com

Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.

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