This archive report was first published on 24 August 2021.
On August 24, 2021, businesses in Kenya gathered to discuss the high cost of doing business amidst the COVID-19 pandemic. The meeting, themed 'Reduce Cost of Living', highlighted the economic challenges faced by local businesses.
Kenya Association of Manufacturers (KAM) Chairman, Mucai Kunyiha, raised concerns over the additional taxes imposed on businesses, including inflation adjustment on specific rates of duty. He stated that the introduction of such measures is counterproductive and has acute consequences across all sectors of the economy.
'It is becoming more expensive to operate in Kenya due to the introduction of taxes, fees, levies, and charges,' Kunyiha said. 'The Crop (Nuts and Oil Crops) Regulations 2020 introduced new fees and levies as a measure to control thirteen scheduled crops. The 2021 Finance Act has also introduced excise tax on raw materials and 16% VAT on the supply of some products.'
According to Kunyiha, the government's proposed 4.97% inflation adjustment on specific rates of duty will have an impact on consumers, manufacturers, and negate gains made in the fight against illicit trade.
Other speakers, including Institute of Economic Affairs (IEA) CEO, Kwame Owino, and Micro, Small and Medium Enterprises (MSME) Alliance of Kenya CEO, Samuel Karanja, echoed Kunyiha's concerns. They emphasized the need for a thriving private sector and a conducive business environment to increase MSMEs competitiveness and productivity.
