Locals to pay more as governors mull taxes

Boda boda riders wait for customers at the Kakamega bus park. [File, Standard]

Traders and lobby groups in Western region have opposed a decision by the four county governments to introduce new levies.

The new taxes affect Kakamega, Bungoma, Vihiga and Busia counties.

Kakamega Governor Wycliffe Oparanya, Wilbur Ottichilo (Vihiga), Wycliffe Wangamati (Bungoma) and Sospeter Ojamoong (Busia) are seeking to increase revenue collection in the wake of county budget cuts by Sh9 billion.

The county bosses are tactfully pushing for higher taxesthrough their respective County Financial Bill 2018, which is similar to the controversial Finance Bill 2018 signed into law by President Uhuru Kenyatta last month.

Mr Oparanya has since signed the Bill into law after removing a Sh200 levy that would have been charged on every tree locals cut down. Other proposed levies have become operational.

Under pressure

The governors have come under pressure to rein in unnecessary expenditure and review their County Integrated Development plans (CIDPs) to operate within the budget cuts passed by Parliament in the Finance Bill 2018 on September 20.

Among the sectors targeted by the proposed levies are transport, agriculture, markets, waste disposal and hospitality. So far, boda boda riders, hawkers and other traders have urged the governors to reconsider their stand.

For instance, boda boda operators and the business community in Vihiga are expected to dig deeper into their pockets to help the county government realise a target of Sh153.7 million in local revenue.

The county hopes to introduce monthly tickets of Sh2,500 for matatu operators to seal revenue leaks and enable taxes collected from the public transport sector to grow to Sh43 million, up from the current Sh33 million.

Matatu operators

Currently, matatu operators pay Sh50 per trip, but the county administration has in the past complained that leaks at the toll stations have caused significant losses of revenue from the busy sector.

The county is also hoping to ease dependence on national government disbursements as it seeks to fund its Sh6.4 billion budget with only Sh4.5 billion expected to come through from the exchequer during the 2018-2019 financial year.

Vihiga County Trade Executive Geoffrey Vukaya said boda boda operators would be charged Sh200 every month starting this financial year. The sector has not paid taxes over the last five years.

In Kakamega, hawkers will pay Sh1,600 for an annual single-business permit in the rural areas and Sh3,400 in urban areas.

Restaurant owners in rural and urban areas will be subjected to an annual levy of between Sh2,500 and Sh10,000.

A new application fee for branded kiosks and market stalls will be set at Sh500.

On transport and storage, there are new annual taxes of up to Sh8,500 in rural areas. Fuel stations have not been spared - those with six fuel pumps, garage and workshop will pay Sh30,000 in urban areas.

Tuk tuk operators will pay up to Sh40 a day while lodging owners will pay Sh40,000 annually for those with 50 rooms and above in rural areas, and up to Sh85,000 in urban areas.

Smaller lodging facilities will pay up to Sh12,750 in levies.

The county government is hoping to meet a new revenue target of Sh1 billion to fund its Sh14.5 billion budget.

In response to the bill, Bernard Oundo, chairman of the Kakamega Traders Association, said the new taxescould render them insolvent.

Sh10 daily

In Busia, boda boda riders are adamant that they will not pay Sh10 daily, translating to Sh300 per month in taxes.

County Director of Revenue Antony Opondo said the county government had failed to meet its target as it had recorded low revenues for the past three years.

In Bungoma, Governor Wangamati accused his political detractors of inciting boda boda riders against paying taxes.

The county government resolved that every rider would Sh1,000 annually.

"There has been propaganda and misinformation about the issue of taxation. However, I urge the riders to paythe levies. These are annual and not monthly fees as some people have said," said the governor.