City traders get reprieve in tariff row but...

Traders at Gikomba market in Nairobi. [Edward Kiplimo, Standard]

Members of Nairobi Business Community (NBC) yesterday got a temporary relief after the government agreed to release their 700 containers in two weeks.

In a meeting held at the Deputy President Rigathi Gachagua’s official residence, it was resolved the traders will pay an import duty of Sh2.5 million per a 40 feet container as opposed to the new tariff of Sh3 million which came into effect a month ago.

But the traders will have to wait and see if Parliament will change the law to ease their tax burden. The meeting came a day after the businessmen protested against the new levies, and threatened to hold street demonstrations similar to the ones held during Uhuru Kenyatta's administration.

Gachagua will convene another sitting on April 10 with the stakeholders to ensure that the resolution has been effected.

“The Kenya Kwanza administration is a listening government, from the April 10 meeting, we shall also be holding monthly meetings for six months to ensure that all the traders’ complaints have been addressed in efforts to solve the trader’s issues in short term, midterm and long term measures,” said Gachagua in a phone interview.

The measures will include adjustments of legal, policy and administrative strategies that will see a win-win situation and a joint committee that was selected yesterday will lead the process

He added that the stakeholders resolved that the traders will be issued with a single certificate of conformity and compliance from the Anti-Counterfeit Authority and Kenya Bureau of Standards instead of double inspection of goods by the two State agencies a move that led to double taxation and duplication of duties.

 Gachagua directed Kenya Revenue Authority to negotiate with Shipping Lines and Kenya Ports Authority on demurrage costs

Nyamakima traders association chairperson Nelson Iruku said after the engagement with Gachagua, they agreed to call off their protests which was scheduled to happen next week, as the traders would start the clearance process today (Friday).

“We also agreed that the KRA will not be increasing their import duty arbitrarily without consultations with the traders, a move that has negatively affected the sector. MPs will be mobilised to re-look at the tax regime to allow us to pay reasonable taxes,” Iruku said.

The traders’ representative said the April 10 meeting will address the harmonization of taxes by the government agencies to address the complaint of duplication of duties and unreasonable taxes by the tax man.

 Iruku, however, said the traders will also be pushing for the government to address the issue of unfair competition by Chinese traders who have infiltrated the market after importing goods disguised as zero-rated construction materials.

"It is a double tragedy for us because while they are exempted taxes in our country, their country also gives them tax rebate that makes them sell their produce at lower prices, a move that was unfair to us," Iruku noted while maintaining that they also want the government to re look into the issue of parallel importation was a blow to them.

Yesterday's meeting was attended by the KRA chairman Antony Mwaura and the Commissioner General Humphrey Watanga, while the Anti-Counterfeit Agency was represented by its chairperson Joseph Kabeabea and Chief Executive Officer Mbugua Njoroge. Trade and Cooperatives Ministries were represented by Principal Secretaries Alfred Ombudo and Susan Mangeni.

Kenya Bureau of Standards Managing Director Esther Ngari, National Standards Council Antony Munyiri, Starehe MP Amos Mwago and Nairobi Deputy Governor Njoroge Muchiri were also present in the meeting.

Iruku said traders were staring at Sh3.5 billion losses, a move that threatened closure of their premises and then attract auctioneers.

“Other implications of the increased duty fees include job losses and increased cases of insecurity while the few who will brave the high tax regime are forced to pass over the costs to the end consumer,” the trader added.