KNCCI president decries ‘punitive’ levies required to set up business in Kenya

The Kenya National Chamber of Commerce and Industry (KNCCI) President Erick Rutto has decried the numerous levies and certifications entrepreneurs are required to pay for when setting up businesses in Kenya.

Dr Rutto says the requirements by regulatory bodies, government agencies, and county governments are turning away investors.

He has cited a case of a food processing company with 30-50 employees, seeking to set up shop in Kajiado County, which is required to pay for 20 different clearances amounting to over Ksh.337,000.

“This is not competitive as a country and that is why the companies that have been there for a long time are the ones that still exist; you cannot add more into the pipeline,” Rutto told Spice FM in a Wednesday interview.

“We have to do away with extremely punitive trade barriers as a country.”

Rutto says the food processing business needs to pay for a Ksh.34,000 Kenya Bureau of Halal Certification valid for only 12 months, a Kenya Bureau of Standards permit worth Ksh.58,000, and a Ksh.50,000 food and hygiene license.

Additionally, the county government requires them to pay for a Ksh.13,000 unified business permit.

“We want a unified business permit for the entire country, not one for each county,” he said.

The KNCCI president says while Kenya has highly skilled and innovative workers and businesspeople, “the barrier to entry has to be reduced.”

He proposes a “phased-out” tax payment plan comprising holidays for start-up companies of up to two years, which he says will also widen the tax base in the long run.

“After five years, when they are in the sixth year and can now run, the government can come in. That would enhance formalization and bring businesses to the tax bracket, enhance our competitiveness, and diversify our products,” noted Rutto.