Nairobi business community plans protest as over 700 containers held at port

Traders and hawkers at Gikomba Market continue with their daily normal business. [David Gichuru, Standard]

The revolution by small-scale traders that birthed the Hustler Movement and ultimately turned the tide against former President Uhuru Kenyatta and Azimio la Umoja coalition in Nairobi and Mt Kenya region is now haunting President William Ruto’s administration. 

Members of the Nairobi Business Community (NBC) are up in arms over what they term as “choking punitive taxes” from the administration - one that rode to power on the back of small and medium enterprise traders christened hustlers.

The entrepreneurs, who include traders from Nyamakima, Kirinyaga Road, Dubois Road, Gikomba market and River Road area, have now threatened to go on the streets to oppose the increment of import duty from Sh2.5 million to Sh3 million per 40-feet container.

Apart from the tax rise they are also opposed to the introduction of a multi-agency team camping in Mombasa waiting to impose taxes on their cargo, a move they term as the biggest betrayal by their government. In the run-up to the last election, President Ruto and his deputy Rigathi Gachagua endeared themselves to these traders by demonising the government for clamping down on counterfeits and introducing taxes that affected these traders. Now the shoe is on the other foot. 

According to Nelson Iruku, Nyamakima traders chairperson, more than 700 40-feet containers are stuck at the Kenya Ports Authority (KPA) in Mombasa because traders cannot afford the tax increment of Sh500,000.  And every day the container is detained at the port it is attracting a Sh8,000 storage fee.

“To add insult to the injury, over and above the increment of the duty fees by the Kenya Revenue Authority (KRA), Anti Counterfeit Authority (ACA) Kenya Copyright Board (Kecobo), Kenya Bureau of Standards (Kebs) have also camped in the port demanding that we part away with taxes,” decried Iruku.

As a result of the situation, Iruku said traders are counting massive losses of more than Sh3.5 billion. He says such a loss to the trade will see many close shop. 

“Other implications include job losses and increased cases of insecurity while the few who will brave the draconian tax regime are forced to pass over the pain to the consumer,” he added.

John Karanja, a trader at Gikomba said the taxman ought to be considerate to the traders who have also been hard hit by the high cost of living and an ailing economy.

“This administration needs to care for the small scale traders because they too have been affected by the inflation and when they announce things are getting better, they impose taxes that will otherwise send us home,” he said.

Some of the taxes that traders have been slapped with include Kecobo’s blank tape levy, which they have cited as a thorn in the flesh, anchored on the copyright law that was effected in 2022 months after the Kenya Kwanza administration came into power.

In the levy, audio cassette, audio cassette mini disc, audio-CDR, Video cassette attract Sh5 per item while DVD-r, DVD+, Blu-ray disc, Trayan discs are levied Sh10 per item.

Photocopy/printing Paper per ream is charged Sh20 while personal Laptops/computers, mobile phones, and smartwatches are charged 1.5 per cent of purchase price net taxes.

The traders claimed to have been duped because when former President Uhuru Kenyatta raised taxes and destroyed counterfeits, they joined the Hustler Movement and campaigned against Uhuru’s candidate Raila Odinga.

“They accused Uhuru of being anti-small scale traders and we believed them. We conducted protests in the streets of Nairobi to oppose and criticise Uhuru but little did we know that we were rearing a snake that would return to devour us,” Iruku said.

Counterfeits

The traders were referring to the 2018 crackdown on counterfeit and contraband goods in a campaign led by former President in his efforts ‘to protect Kenyan industry and consumers in a drive that saw goods worth more than Sh1.5 billion destroyed in a bonfire witnessed by Uhuru.

Coincidentally, unlike in 2018 when the current National Assembly Chairperson Budget Committee Ndindi Nyoro condemned Uhuru for the traders’ woes, today, the Kiharu MP is condemning the KRA and the Anti-Counterfeit Authority for enforcing a budget he helped draft and passed into law in parliament. He has directed them to halt the implementation of the tariffs and conduct public participation with stakeholders in the sector.

“This is a government that supports small-scale business premises. Government agency's work is to incentivise business and enterprise in Kenya and I urge the entities, including KRA, to reconsider the increment of duty from Sh2.5 million to Sh3 million,” he said.

He said the proposal should stop immediately because traders bought their goods when the dollar was high and any move to raise taxes will negatively affect their businesses.

But traders laughed off Nyoro’s claims terming them crocodile tears and directed him to go back to Parliament to initiate measures that would protect them from the punitive taxation.

“He is the one who has given the KRA powers to come after us. This is why we feel betrayed by this regime,” Iruku added.

In an effort to stem the growing resentment towards government, Gachagua is expected to meet with the traders today at his official residence to chart a way forward.