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COUNTY REVENUE

High taxes hurting county businesses- report

In Summary

•57 per cent of respondents in the Service Index Delivery Survey said there are many taxes and levies, which have dampened business activity 

 

Trade CEC Jubat Adow pens down information from one of the traders in Garissa town. The county government will map out all businesses operating in the region to ease planning and service delivery.
Trade CEC Jubat Adow pens down information from one of the traders in Garissa town. The county government will map out all businesses operating in the region to ease planning and service delivery.

High taxation is still a major roadblock for county businesses seven years after devolution was introduced, a survey has shown.

According to the Service Index Delivery Survey in five counties including Mombasa, Kisumu, Nairobi, Uasin Gishu and Nakuru, 57 per cent of respondents mentioned that there are many taxes and levies, making it near impossible to operate their businesses.

Another 11 per cent of the respondents cited inaccessibility of county offices to raise concerns as a huge hindrance.

 

Ipsos public affairs director Hilda Kiritu said the businesses faced hardships in getting licenses, water and electricity, reported cases of crime and corruption and unfavorable environmental factors.

36 per cent of respondents felt that devolution has increased corruption at the county level while 14 per cent feel it has increased nepotism. Eight per cent said it has lead to unequal distribution of resources. 

“This high concerns of the taxation adds to the unavailability of jobs with a bit of nepotism and corruption, therefore poor economic well-being,” Kiritu said.

The survey conducted by Kenya Alliance of Resident Association, Ipsos and the Hanss Serdel Foundation selected the biggest counties with a mix of urban and rural settings.

The institutions noted an increase in levies was the result of a rush by counties to raise their own source revenue to bridge funding gaps from the equitable share distributed by national government.

However, the devolved units have been allocating much of the raised funds to the enhancement of water, roads while failing to create trade and investment opportunities for the sector.

As a result, roads form the highest percentage of development projects implemented at 56 per cent, health at 12 per cent with water and education at 10 per cent.

 

However, only one per cent of projects under electricity, security and agriculture were worked on. The manufacturing sector attained only two per cent of implemented projects.

“President Uhuru's agenda is well known at the ministries level and national government has to do much in convincing counties on the Big Four agenda,” she added.

The report shows Kenyans are happy about devolution being able to enhance the distribution of resources.

The majority (49 per cent) of respondents said they were satisfied with the performance of their county government. Kisumu County had the highest (60 per cent) of respondents who were satisfied while Nakuru had the least (38 per cent).

The study is set to form a baseline for comparison to subsequent research that will be done later.