Harmonized levies to reduce cost of doing business by 29%, manufacturers say

The Kenya Association of Manufacturers (KAM) are calling for harmonization of overlapping charges between the national and county governments which contribute to a rise in the cost of doing business in the country.

According to the Regulatory Audit Survey 2020 by the lobby group, various overlapping charges and levies imposed by various agencies such as water and sewerage services, movement of goods taxes and levies among are a disadvantage to Kenya’s competitiveness hence their harmonization or realignment will be key in reducing the cost of doing business by up to 28.9%.

“At the national level, manufacturers are required to adhere to duplicating requirements, from different regulatory bodies, in addition to meeting numerous tax obligations. In the counties, we have to pay various fees, levies and charges. This drives up the cost of doing business in the country, thus reducing our competitiveness locally, regionally and even globally,” said KAM chairman Mucai Kunyiha.

He says, though regulations seek to create a level-playing field for businesses, regulatory overreach hinders the competitiveness of local industry and as such, both levels of government need to harmonize laws, policies and regulations to drive the competitiveness of local products as export of goods gain momentum after COVID-19 disruptions.

“I urge both levels of government to align overlapping mandates and roles; reduce fees, levies and charges and reduce the turnaround time for granting permits by businesses. By doing so, the laws, regulations and policies will be industry-centred and in turn, support competitive industrial development,” he added.

State Department for East African Community (EAC) Principal Secretary, Dr. Kevit Desai further called for harmonization of regulations across the region, to enhance market access, particularly in the EAC.

“Addressing regulatory challenges faced by manufacturers will make our exports more competitive in the region. Greater levels of industrial integration and promotion of value addition shall enhance the overall diversity of our products and services.” said Dr Desai.

The Regulatory Audit Report highlights some of the regulatory challenges facing industry at both national and country levels, as well as recommendations to create an enabling business environment.

  

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