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Mombasa County brings back proposal to raid port for more revenues

Containers before being loaded into the ship at Mombasa Port on October 4, 2022. [Omondi Onyango,Standard]

Mombasa County government has proposed new levies at the port in a bid to raise additional revenue.

The administration is seeking to collect levies from imported vehicles, containers, loose cargo and health services from local and international ships.

According to the Finance Bill, the county authorities want to impose port cess for containers at the rate of $10 (about Sh1,210) per 20-foot equivalent units (teus) and port cess for loose cargo at $0.5 (about Sh60) per tonne.

International ships will be charged $1,000 (about Sh121,000) for port health services while local vessels will pay $20 (about Sh2,420) if the proposed levies are approved.

Other port-related businesses targeted to raise revenue are vehicle showrooms that dot the island.

The county government wants to raise the charges for a showroom of one to 10 vehicles from Sh60,000 to Sh100,000.

For showrooms with 10 vehicles and above, Governor Abdulswamad Nassir’s administration has proposed to raise charges from Sh100,000 to Sh150,000.

But the proposal to introduce a US$5 (about Sh600) port cess for each imported car has drawn protests from vehicle importers, who also own most showrooms, claiming this will amount to double taxation.

“It will be impossible for us to pay increased charges for a vehicle showroom and at the same time pay US$5 port cess for a vehicle unit at the port. This is double levying,” argued Car Importers Association of Kenya (CIAK) chairman Peter Otieno in a memorandum.

He proposed that the showroom of one to 10 vehicles be levied Sh30,000, a medium showroom pays Sh45,000, a semi-large showroom Sh75,000, and a large showroom Sh100,000.

“It is to our surprise that the container freight stations (CFSs) are also being levied the same rate of Sh150,000 as showrooms. CFSs are accommodating thousands of vehicles annually and some combine even containers,” said Mr Otieno.

The Bill was subjected to public participation in the 30 wards last week, while the Governor also met delegations from various sectors over the proposal.

Mr Nassir is upbeat that most of the business groups have understood his intention.

“I have been meeting various delegations and I have shaken hands with them at the end of the meetings after they stood my intention,” he said.

But this is not the first time the county government has attempted to introduce levies at the port.

Nine years ago, former governor, Hassan Joho, announced plans to charge one dollar per tonne but this was resisted by the Kenya Ports Authority (KPA) management.

“My county government will seek the support of the assembly and the Senate to pass legislation that will compel the port of Mombasa to pay certain levies to the county government,” said during the opening of the county assembly.

He explained that the port levies would be used to improve the road network.

The former governor had argued that the move would reduce traffic jam, thus enhance service delivery.

Earlier, the defunct Mombasa Municipal Council had also attempted to charge one dollar per tonne at the port, but KPA engaged in a protracted legal tussle that forestalled the plan.

Last week, the chairman of the Old Town Residents Association Mbwana Abdalla welcomed the push by the new administration to get more revenue from the port, saying it was long overdue.

Mr Abdalla, also the chairman of the Kenya Coast Blue Economy, a lobby group, urged the national government to hand over Mombasa Old Port to residents through the county government and to support tourism.

“We are also asking the national government to introduce an open sky policy just like in Tanzania to attract more international flights to Mombasa. We want the national government to build an international conference centre at the Bamburi Butterfly Pavilion to support the tourism industry on Coast,” he added.

Meanwhile, Mr Nassir has written to KPA demanding that all projects at the port get county government approval.

He said the port projects must be fully regulated by both the county and the National Construction Authority to ensure conformity with safety standards.

His government is grappling with Sh4 billion debt inherited from the Joho regime as well as salary arrears.