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Kenya Association of Manufacturers call for sound tax policies

Friday, February 28th, 2020 00:00 | By
Interior Cabinet Secretary Fred Matiang’i (centre) chats with Kenya Association of Manufacturers chief executive Phyllis Wakiaga (left) and chairman Sachen Gudka during the launch of the Manufacturing Priority Agenda 2020 in Nairobi yesterday. Photo/PD/Alice Mburu

Lewis Njoka @LewisNjoka

Manufacturers have called for enhanced ease of doing business to spur growth in the sector and increase its contribution to economy.

They said high cost of doing business, unpredictable policy environment and an unpredictable tax regime are making it difficult for manufacturers to operate in the country with some opting to exit the market.

Speaking during the release of the sector’s priority agenda, Kenya Association of Manufacturers (KAM) chief executive Phyllis Wakiaga said while significant progress has been made in the war against counterfeits, tax regulations that stifle export trade and non-tariff barriers that hinder trade between East African Community member states are some of the challenges that have impacted the manufacturing sector negatively.

Policy environment

“Increased cost of doing business and an unpredictable policy environment are negatively impacting the sector’s competitiveness. This has resulted in scaling down of operations, job losses and profit warnings from different players in the industry,” she said.

KAM chairman Sachen Gudka said most tax measures specific to the manufacturing industry had failed to create a conducive environment for businesses to thrive.

“Ideally, progressive tax policies are meant to create an environment for industries to thrive. For this to happen successfully, tax measures need to be easy to effect, coherent and predictable. So far, most tax measures specific to this industry have not achieved this,” said Gudka.

The two were speaking at a Nairobi hotel during the launch of KAM’s Priority Agenda 2020, an annual document that highlights challenges hampering growth in manufacturing sector and outlines strategies to deal with them.

Interior Cabinet secretary Fred Matiang’i assured the sector that the government was working to streamline its operations to create a conducive business environment.

“Previously, the need for approval from various agencies increased the cost of doing business and was an opportunity for rent-seeking. The one-stop-shop for service delivery for businesses will change this.

We have also held engagements with county governments to harmonise county cess, fees and charges to reduce the cost of doing business amongst counties,” said Matiang’i.

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