The implementation of the Finance Act will hurt these few formalized businesses, the Kenya National Chambers of Commerce and Industry (KNCCI) has said.
Speaking in Mombasa Thursday evening, KNCCI president Erick Ruto said there is a need to ensure that all businesses in the country are formalized so that taxation is spread across established business ventures.
He officiated the Chamber Business Connect Dinner which brought together about 150 businesses in the county.
“We are telling the business community that yes we are going to look at the effects of the Finance Act 2023 right now, but what we want to say is that government has to run its services and for it to do so it must be able to collect enough taxes", Ruto said.
He added that there are few businesses in the country that are formalised, therefore in terms of collection of revenues and taxes, those few businesses are the ones being overtaxed to the last shilling.
Ruto said that the chamber was looking into how they will help formalise more businesses especially those operating as Small and Micro-enterprises.
He added that they want to help the business to be compliant in paying taxes to widen the tax bracket by simplifying the compliance process for them.
“We have had discussions and we will continue engaging with the business community to be able to see how these taxes can be able to be spread across the bottom of the pyramid so that we do not overburden the few formalised businesses,” he said.
Ruto added that as a private sector, they don’t want to be reactive, but be proactive saying that they had already started engaging the government about the next Finance Act for the financial year 2024/2025.
The fact that implementation of the act will most definitely increase the cost of doing business.
Ruto at the same time lauded the political class for agreeing to sit down and dialogue to solve their political differences that he said had adversely affected the economy, especially with the demonstrations.
He said that a survey they conducted revealed that they were losing over Sh1.2 billion every day there were demonstrations.
“As private sectors, when there are demonstrations, we are the first to be affected because our activities are closed and we are unable to function. I want to urge the political class to be able to come together and be able to talk and discuss issues”
“We as the private sector don’t want interruption of the economy and any violence,” he said.
He also urged the political class to respect the constitutional processes that are put adding that they were available as the private sector to be able to mediate the rebuilding of relationships.
Ruto said that they were talking to other private sector organisations and also civil society organisations to see how they can be able to have a different method of how to express their ideas if they were in disagreement with what is constitutionally prescribed.
This he said will ensure that they have another aspect of where parties that are warring can be able to meet and be able to discuss on a level playing ground.
“We urge our political class to be able to engage so that we do not have our economy disturbed during each election cycle,” Ruto said.
KNCCI vice president Mustafa Ramadhan said that the chamber connects dinner will be replicated across the chapters in the 47 counties.
He said that the event provides a platform for their members to interact and connect, and at the same time gives KNCCI an opportunity to listen to members’ concerns and also share with them new ideas and vision of the chamber.
“We believe through the leadership of Ruto that membership to the chamber will be the best investment for any business to do. Ruto is a leader with transformative ideas, he is a leader who wants to see a very vibrant business community in Kenya,” he said.
Mombasa Governor Abdulswamad Nassir pledged that his government will continue supporting and working with KNCCI, in ensuring that they have an enabling business environment in the county.
To enable businesses to get better services, Nassir said that his administration was in the process of establishing the ease of doing business desk, which will be a one-stop shop for businesses seeking county services.
“We want to give you a concierge where we will have a one-stop shop. Business people won’t have to move from different departments seeking their issues to be handled, they can be done at one point,” said Nassir.
Nassir added that the county seeking to work closely with the chamber as it aims to integrate its revenue collection system by introducing the Mombasa Revenue System, which will operate like the Kenya Revenue Authority that collects revenue on behalf of the national government.
The governor said there are ongoing discussions concerning CESS charges in a bid to lower the cost of doing business and promote inter-county trading.
“CESS is something that I have personally raised to the Council of Governors. I recently had a meeting with IATA members and we also discussed this with the president when he recently visited the port of Mombasa,” he said.
