Nairobi to raise cost of business permits by 300pc

Politics and policy

A shoe shiner attends to a client in Nairobi. Informal traders are set to buy business permits at Sh10,000. PHOTO | FILE | NATION MEDIA GROUP 

By KIARIE NJOROGE

In Summary

• Informal traders including shoe shiners, sweets and newspaper vendors operating in the city centre are set to acquire business permits at Sh10,000 annually from the current Sh2,500, a four-fold growth.

Shoe shiners and newspaper vendors will be hit hardest by Nairobi’s plan to increase the single business permit fee by up to 300 per cent as the county races to raise cash to meet its Sh28.7 billion budget.

City Hall is targeting to raise Sh2 billion from business permits. The rate increase is a departure from the first year of the Evans Kidero-led government which spared small scale and informal traders from additional levies.

Business permits for large traders like supermarkets and transport companies have been left unchanged in Nairobi’s Finance Bill, which has been published for public scrutiny.

Informal traders including shoe shiners, sweets and newspaper vendors operating in the city centre are set to acquire business permits at Sh10,000 annually from the current Sh2,500, a four-fold growth.

Nairobi is proposing to raise the permits for small traders like boutiques, chemists, shops and butcher shops with less than four employees to Sh7,000 from Sh5,000, reflecting a 40 per cent increase.

Trade executive Anna Othoro said that the amount is not excessive given the turnover enjoyed by the outlets. “If you divide the amount by the 12 months then the trader is only paying Sh583 per month. But look at the amount that the businesses bring in with a turnover of over Sh50,000 per month,” she said.

Ms Othoro added that there is pressure on the county to deliver services owing to the increased number of businesses, which means that charges have to be adjusted. Nairobi is keen to grow revenues and secure cash for project financing as it struggles to reduce recurrent expenditure like wages that take a huge chunk of City Hall’s income.

The jump will affect thousands of shops given the rising popularity of retail outlets popularly known as exhibition stalls, especially in the central business district (CBD).

The rise in business permit fees is expected to be particularly punitive to the huge number of informal traders. Unlike hawkers, these traders are allowed to operate in the CBD but will now have to pay more to avoid being kicked out.