KAM urges counties to attract business by revising tax regimes

Corporate News

Nation Media Group CEO Linus Gitahi (left) chats with Kenya Power CEO Ben Chumo during the Governors Summit held at Enashipai Resort and Spa, Naivasha, February 26, 2015. Mr Gitahi said that devolution has unlocked numerous opportunities for investors and improved Kenyans’ lives. PHOTO | JEFF ANGOTE 

By CHARLES WOKABI, Cwokabi@ke.nationmedia.com

Investors want county governments to restructure their tax regimes in order to make the devolved units more attractive to business.

Speaking at the ongoing Governors Summit in Naivasha on Thursday, Kenya Association of Manufacturers (KAM) chairman Pradeep Paunrama said there were countless business opportunities in counties but most investors are repulsed by unnecessary taxes imposed by county governments.

Hard-pressed by ballooning wage bills and demand for services by the public, some county governments have resorted to imposing levies even on basic services as they scavenge for more revenues.

“As KAM, we have met with governors of various counties and discussed the opportunities we see in their regions. However, in most cases the county governments have imposed too many unnecessary taxes that end up discouraging investors. This is a major issue that they need to think through so that they don’t end up locking out investment,” Mr Paunrama said.

He said that devolution had opened up more investment opportunities which will benefit both investors and citizens of far-flung areas which were previously considered too remote for business.

“The promise of devolution was a promise of new opportunities to the private sector.

‘‘As manufacturers, these opportunities have come in a large way but we still feel that more can be done,” Mr Paunrama said at the forum on Thursday.

Nation Media Group (NMG) chief executive Linus Gitahi said that devolution is a positive development which has unlocked numerous opportunities for investors and improved Kenyans’ lives.

“We can actually create opportunities that can change the lives of Kenyans. We are partners in the journey of transforming this country.’’

The government, whether at the national or county level, needs to work together with the private sector to deliver on the promise of development,” Mr Gitahi said.

The summit, now in its second edition, is convened by NMG as a forum where governors can meet with members of the private sector to chart the country’s development path.

Basic services

Mr Gitahi said that most Kenyans now have access to basic services which were previously out of reach, thanks to devolution.

Mr Isaac Ruto, the Bomet governor and chairman of the Governors Council, said that governors were committed to dialogue with the private sector to see how the two sides can work together to fast-track development.

He dismissed a report by the World Bank which criticised county governments for prioritising salaries and operations in their spending at the expense of development.