Why the cost of doing business is set to be expensive in Kisumu

Jackton Ahawo, a trader, makes a frying pan at Kibuye market in Kisumu. [Collins Oduor, Standard]

Residents and traders in Kisumu are bracing for steeper levies after the county government started implementing the County Finance Act 2018.

The county has introduced new taxes for various categories of business as it seeks to widen its revenue stream to support programmes in the 2018/2019 budget.

Among those expected to bear the brunt of the new tariffs are agricultural and mining companies, as well as operators in the informal sector.

According to the new law, agricultural companies seeking to establish businesses in Kisumu will be required to pay Sh150,000 in licensing fees while mining companies with more than 100 employees will also pay a similar amount.

Private businesses seeking to create private parking will pay between Sh30,000 and Sh100,000 each year.

The county government has also hiked taxes for different categories of traders by between 50 and 100 per cent - a decision likely to spark protests among those affected. The health sector has not escaped unscathed, with the county introducing a Sh5,000 maternity charge, which flies in the face of the national government’s free maternal care policy.

Express displeasure

Although the levies were unanimously passed by the county assembly on September 28, residents have continued to express displeasure about some taxation items.

County Residents Voice chairman Audi Ogada said the levies imposed in the health sector were unconstitutional and illegal.

“We are disappointed by the county government for taxing residents who should have access to free healthcare. Maternity should be free, and other absurd charges dropped. The county should put the lives of its citizens first,” said Mr Ogada.

Also targeted by Governor Anyang’ Nyong’o’s government is the education sector, where small private learning institutions have been slapped with a Sh50,000 tax while medium colleges will pay Sh100,000.

The new taxes come a few months after Controller of Budget Agnes Odhiambo put the county on the spot over declining revenue generation despite the automation of its collection systems.

During Quarter-One of the 2017/2018 financial year, the county only raised Sh123 million compared to Sh211 million in a similar period in 2016.


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