Businesses have decried the high cost of doing business in the wake of the economic challenges brought about by the COVID-19 pandemic. In a meeting themed Reduce Cost of Living, businesses have expresses concern on the current focus on politics without practical solutions to bring local businesses back on the recovery track.
Speaking during the meeting, Kenya Association of Manufacturers (KAM) Chairman Mr. Mucai Kunyiha, said, “It is becoming more expensive to operate in Kenya due to the introduction of taxes, fees, levies and charges. For instance, the Crop (Nuts and Oil Crops) Regulations 2020 introduced new fees and levies as a measure to control thirteen (13) scheduled crops. Through the 2021 Finance Act, the government has introduced excise tax on raw materials and 16% VAT on the supply of some products, effectively increasing the cost of doing business and final consumer prices,” said Mr. Kunyiha.
Mr. Kunyiha further observed that the government needs to review such measures, terming them counterproductive and having acute consequences across all sectors of the economy.
Also speaking at the meeting, Institute of Economic Affairs (IEA) CEO, Kwame Owino said, “If private sector growth fails to happen, then economic development shall remain stunted because of the numerous taxes they have to pay. Africa needs to focus on long-term prosperity, as opposed to short term ambitious revenue collection targets. As a country, it is critical that we stop gauging our revenue authority’s performance and efficiency, based on their record-breaking rates of tax collection.”
Micro, Small and Medium Enterprises (MSME) Alliance of Kenya CEO, Mr. Samuel Karanja called on the government to do away with regulations that hinder SME growth. He added that there is urgent need to formalize the cottage industries, calling for the creation of a conducive business environment, to increase MSMEs competitiveness and productivity.