Taxation in Kenya has been a significant concern for flower growers, gradually eroding their competitiveness in the global market. Here are some key factors contributing to this issue:

1. VAT Refund Delays: One of the major challenges faced by flower growers is the delay in Value Added Tax (VAT) refunds. Exporters are entitled to claim VAT refunds on inputs used in the production and export of flowers. However, delays in processing these refunds tie up significant amounts of working capital, affecting cash flow and operational efficiency.

2. High Tax Rates: Kenya's tax rates, including corporate tax and various levies, can be burdensome for flower growers, especially smaller and medium-sized farms. High taxes reduce profitability and limit resources available for investment in technology, infrastructure, and sustainable practices that could enhance competitiveness.

3. Import Duties: Import duties on inputs such as fertilizers, pesticides, and machinery increase production costs for flower growers. These additional costs can make Kenyan flowers less competitive compared to flowers from countries with lower import duties or subsidies on agricultural inputs.

4. Excise Duty on Packaging: The introduction of excise duty on packaging materials has added to the production costs for flower exporters. Packaging is crucial for maintaining the quality and freshness of flowers during transportation, and higher costs in this area further impact the overall competitiveness of Kenyan flowers in international markets.

5. Cumbersome Tax Administration: Complex tax administration processes and compliance requirements can be challenging for flower growers, particularly smaller farms with limited resources. Compliance costs add to the administrative burden and may divert attention and resources away from core business activities.

6. Impact on Global Competitiveness: Collectively, these tax-related challenges diminish the cost competitiveness of Kenyan flowers in the global market. Competing countries with lower tax burdens and more favorable tax policies may have an advantage in terms of pricing and market share.

Addressing these challenges requires a balanced approach that considers the need for government revenue and economic sustainability while supporting the growth and competitiveness of Kenya's flower export industry. Efforts to streamline tax refund processes, reduce tax rates on inputs, and simplify tax compliance could help alleviate the burden on flower growers and enhance their ability to compete globally.