Manufacturers want the incoming administration to prioritise addressing Kenya's unpredictable tax regime.
“Our tax regime is characterised by unpredictability, thus hindering the business community from making long-term investment plans,” Kenya Association of Manufacturers acting CEO Tobias Alando said.
To address this, KAM wants the National Tax Policy currently undergoing review by stakeholders implemented.
The National Tax Policy proposes that tax laws be reviewed every five years, a move that is expected to create a predictable environment for existing businesses, while attracting new investments.
This will revise the current cycle where taxes are reviewed every financial year through the Finance Act.
KRA is also in the process of adjusting excise duty inline with inflation.
“The heavy regulatory burden is a key concern for citizens and business,” Alando said.
The lobby is also calling for coordination between the national and county governments, to enhance efficiency and reduce the cost of doing business.
Manufacturers also want the Ruto administration to address the prevailing lengthy and manual processes for obtaining regulatory permits, the numerous licences required to operate, as well as existing multiple fees, levies and charges.
“We urge the incoming government to reduce the number of regulations and bring down the cost and time spent on compliance, and consolidate regulators at the national and county levels,” Alando told the Star in an interview.
A better regulatory environment , he said, can be achieved through increased stakeholder consultations and impact assessments for proposed legislation to guard against impeding socio-economic growth.
KAM also wants the government to strengthen the country’s supply chains to reduce reliance on imports.
During the Covid-19 pandemic and the ongoing Russia-Ukraine war, consumers have been exposed to rising food and commodity prices as the country remains a net importer.
Products most affected include cooking oil, wheat and maize flour, soap and other detergents, automotive industry and other intermediate materials imported by manufacturers for local processing.
KAM urged the incoming government to prioritise food and nutrition security through increased value addition in the agriculture and agro-processing sector.
Ruto has pledged to put in at least Sh250 billion into the agriculture sector in the next five years.
This is about Sh50 billion annually, if equally distributed, an amount that will be Sh4 billion more than the current budget of Sh46 billion.
Last year, agriculture remained the dominant sector, accounting for about 22.4 per cent of the overall GDP, the Economic Survey 2022 indicates.
The sector's performance is expected to be below par this year due to poor rains and expensive farm inputs.
Ruto has indicated that among his first tasks will be addressing the spiralling inflation.
Global inflation is currently a major concern and countries are focusing more on food security.
Investors in the manufacturing sector also want enhanced access to public information, efficient infrastructure, good judicial resolution and targeted wide sector industrial policies.
Other areas KAM wants addressed include raising export intensity of Kenyan manufacturing, raising investment in manufacturing and county industrial competitiveness.
The association also wants full implementation of the Buy Kenya Build Kenya strategy, national trade policy and the integrated national export development and promotion strategy.
Others are the automotive policy and the draft public procurement and asset disposal policy.
This comes as outgoing President Uhuru Kenyatta's ambitious 15 per cent contribution of manufacturing to the GDP, under his Big Four Agenda, remains unattained.
The share of the manufacturing sector to GDP was 7.2 per cent last year, the Economic Survey 2022 indicates.
Ruto who will be sworn into office next week Tuesday, is taking over government at a time Kenya’s prevailing economic situation is characterised by the high cost of living.
Kenya is also experiencing an ever-soaring levels of unemployment, widening trade deficit, and a heavy public debt burden.
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