Address the high cost of doing business before increasing tax

[Photo: Courtesy]

Despite various reports pointing at the improved ease of doing business, there are still many challenges standing in the way of the private sector. Instead of proposing increased taxes in the Income Tax Bill, the Government should focus on helping companies to compete in an environment of practicable and predictable legislation to allow them to grow their earnings.

Going by the performance of the 64 listed companies on the Nairobi Securities Exchange, the profits of most of these firms have been dwindling over the years as a handful dominate the corporate scene. Between 2013 and 2016 alone, data on 56 listed companies showed that profits had shrunk by about a third, and last year was no better. Many chief executive officers continue to cite red tape, corruption and ever-changing legislation among the factors that complicate the business environment.