MSME Alliance of Kenya CEO Karanja urges policy support as MSMEs struggle under taxation burden

According to Karanja who was speaking on a Citizen TV Day Break panel, the stringent measures are taking a toll on small businesses.

Karanja emphasised that when small manufacturing businesses are scrutinised, revenue authorities frequently assume they have substantial financial reserves and demand a larger share of their compliance efforts.

“They are people who, especially when given positions steal public coffers. They are not there to help or execute policies put in place,” he stated.

He also pointed out that the government's promise of a 'Bottoms Up' approach, aimed at supporting Micro, Small, and Medium Enterprises (MSMEs), has yet to materialise.

Karanja proposed that the government promote domestic manufacturing rather than prohibit imports. He contended that policies intended to protect local merchants have in fact created barriers for businesses, and that increasing tax regulations will not lead to prosperity.

“How do we migrate from importation to production, because you cannot tax people to prosperity saying the GDP is going to go up. You must first facilitate policies to help the local cottage industry,” he remarked.

He also urged President William Ruto, who is set to deliver his first State of the Nation address, to keep his promises to the 'hustlers' who backed his election by assisting struggling MSMEs.

“The president has a hard task to tell us the promises he gave us, what he is doing and explain what we are seeing because we put him in power as hustlers so that he can be able to help us,” Karanja added.

Diana Gichengo, National Coordinator of the Institute for Social Accountability (TISA) also on the panel, chastised Parliament for failing to hold those accountable for financial mismanagement and alleged over-budgeting of her salary by the Controller of Budget Margaret Nyakang'o three times, contributing to the high cost of living.

Gichengo emphasized that immediate action should be taken in Parliament to identify those responsible for financial irregularities, such as the misuse of supplementary budgets, rather than focusing on long-term discussions about reducing living costs.

“Right now, the focus should not be on people discussing ideologies on how to reduce the cost of living in the future at Bomas. We need to see action in Parliament of people being summoned. Who planned to steal? Who stole the capital expenditure under supplementary budget? By now heads should be rolling,” she remarked.

“We have a problem of planning to steal. Parliament is usually comfortable that we have lost such significant amounts of money. They are the holders of the Kenyan pass; they must protect it with all the power we have given them in the constitution.”

Suna West Member of Parliament, Peter Francis Masara, speaking on the same show, sought to clarify the limitations of the Budget and Appropriations Committee, in which he sits, explaining that they mainly discuss departmental block figures and do not delve into individual salary details. 

“It is very difficult at Committee level to go into the itty gritty of individual salaries. At our level, we discuss the block figures of our departments and in most cases; we compare what was allocated in the last financial year and then what is allocated in the current year,” he said.

He also stated that a meeting with the Parliamentary Budget Office will be scheduled in order to further assess the situation.

President William Ruto will deliver his first ever State of the Nation address on Thursday, November 9, since taking over in September last year.

According to a gazette notice, the President will address a joint parliamentary sitting of both the National Assembly and the Senate on the said date at 2:00 p.m.