FINANCIAL BURDEN

Private security sector decry high tax regime

In Summary
  • Parliament annulled laws gazetted in July yesterday, citing impracticability 
  • Private security service providers in Kenya has an estimated workforce of 500,000 to 600,000, a number that requires huge resources to retrain
PSIA Trustee Mr Mureithi ,KRA Consultant Mr Gatere, PSIA Chairman Cosmas Mutava,PSIA Trustees Sokhi and Karanja. (After fruitful discussions on taxation challenges affecting the Private Security Firms in Kenya)

The Protective Security lobby group has welcomed the annulment of The Private Security (General) Regulations, 2019 that required all service providers be inspected, vetted and licensed by the regulator by January 1 or close shop.

Regulations introduced by interior cabinet secretary Fred Matiang'i which operationalised the Private Security Regulation Act 2016 and the Private Security Regulatory Authority (PSRA) also dictated salaries to be paid to employees in the sector on top of retraining by January.

In a statement, Protective Security Industry Association (PSIA), body that represents all local security firms said the implementation of orders in the regulation was expensive and with unrealistic timelines.

 

According to the association's chairman Cosmas Mutava, security service providers in Kenya has an estimated workforce of 500,000 to 600,000, a number that requires huge resources to retrain.

He added that the sector is already squeezed financially due to high tax regime and delay payments, with some clients paying up to 120 days to pay.

The lobby now wants Kenya Revenue Authority to allow its members to be paying Value Added Tax after clients have made payment as opposed to the current situation where they are even forced to borrow to pay taxes.