Policy Guidelines Could Ease Doing Business in the Counties

Policy Guidelines If Adopted Could Ease Doing Business in the Counties

By / Published August 5, 2015 | 9:08 am

Governors and various stakeholders have welcomed the launch of policy guidelines for the drafting of County Revenue Laws saying these guidelines if well implemented would help facilitate ease of doing business at the county and inter-county level.

They made these remarks yesterday during the launch of the Legislative and Economic Policy Framework guidelines that have been developed by The Commission on Revenue Allocation (CRA) and Kenya Association of Manufacturers (KAM) that will provide guidelines for drafting of County Revenue Laws in Kenya. These two documents that were officially handed over to County Governments should assist Counties with proper drafting of county revenue laws that will facilitate business and attract investments.

According to KAM Chief Executive Ms. Phyllis Wakiaga counties have taken shape within their functions however they need to remain competitive without being unattractive to investors. “Manufacturers together with other traders continue to experience challenges as counties introduce very high taxes that are acting as a barrier to distribution of goods across the country. Such include entry fees, multiple distribution fees, multiple vehicle branding fees, single business permits demanded in every county of distribution, Cess, Building Plan approvals, export certificates amongst others.”

The launch of these policy documents by CRA and KAM is an initial step towards mentoring the Counties on doing it right in order to support business growth in the Country. KAM is looking forward to a lasting solution to this issues that are ailing industry. “It is our desire that as the Counties warm up to pass their 2015/2016 Finance Bills, they shall be properly guided by the two documents that we are launching today,” she said.

The Chairman of the Commission on Revenue Allocation, Mr. Micah Cheserem, urged the private sector to prioritise the top key issues per county and work with the county government to have these issues addressed.

The meeting was attended by governors Wycliffe Oparanya, Dr. Evans Kidero and Prof Kivutha Kibwana who are hopeful that the model laws will help facilitate the operations of the counties. They called on the national assembly to facilitate the actualization of such legislation within the shortest time possible. The legislation should be standard and promote movement of goods within the counties and curb double taxation. Payment of cess from county to county should be addressed as this is increasing the cost of business and ultimately the cost will be passed on to the consumer.

The governors further echoed the need to harmonise laws within the different counties. “Inconsistencies in revenue collection needs to be addressed as well as the development of a rating act. There is dire need for an updated rating act which is reflective of the current economic situation and developments in the country.” They also called for capacity building at county level and the need to take into consideration specific county needs as not all counties are the same.

The meeting concurred on the need for public participation as this is the forum provided for consultations and receiving feedback from the public and private sector players. “Public should be involved so that there is ownership in the process and in the end product and public not caught up by surprise.”

County Assembly speakers forum representative called on the National and county governments to be accountable for the revenue that has been allocated to them. “Taxes must not be the driver of devolution rather the ability to deliver facilitation for business and investments. Taxes should be put in the right place and ploughed back to infrastructure and other projects that will advance this economy.” He implored upon the counties to focus on delivery saying “Every governor must leave a track record of performance that will speak to a re-election for another term.”

During the National conference themed “Doing Business with Counties,” that was held in October 2014 one of the resolutions and way forward was for CRA and KAM to facilitate county governments to review and develop suitable revenue legislation that would boost revenue collection and assist counties to attract and retain investors.

In addition to the draft laws that were developed for all 47 counties (available on the CRA website here) these two additional policy guidelines have been developed to further assist Counties on proper drafting of county revenue laws.

KAM emphasized on the urgency to revisit the Trading laws developed in the Counties and to align them to the licensing reforms that Kenya embraced in the early 2000’s. The meaning and purpose of this permit has been destroyed with the issuance of multiple permits and licenses that are intended to be components of the single business permit. “The demand for the same in every county continues to make the situation worse for our traders,” said Ms. Wakiaga. KAM called upon the Council of Governors, CRA, IBEC and the other relevant Government entities to give this issue the attention it deserves.

Copies of the two publications can be downloaded Here and Here.