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Economy

City businesses feel the pinch of high levies

Taxi driver Justus Karanja during the interview in Nairobi on Thursday. Traders have asked City Hall to review charges. Photo/JEFF ANGOTE
Taxi driver Justus Karanja during the interview in Nairobi on Thursday. Traders have asked City Hall to review charges. Photo/JEFF ANGOTE 

Small businesses face sharp fall in their profit margins this year after the Nairobi County increased levies recently.

Some establishments saw single business permit fees rise by more than 100 per cent with restaurants, small supermarkets, taxis and bars among the most affected.

Nicholas Muguna, who runs Café San Burners, on Tom Mboya Street said his obligations to City Hall jumped from Sh38,900 to Sh82,000 with the single business permit fee jumping 134 per cent from Sh15,000 to Sh35,000.

“There has been no change in business but we are now expected to shoulder these extra charges. It doesn’t make sense, for example, that for the food hygiene licence for which I used to pay Sh300 I’m now expected to pay Sh5,000,” he said.

For taxi owners, their fate remains unclear. According to Justus Karanja, when they recently went to renew their business permits they were told to wait until fees are reviewed.

They have been paying Sh5,200 but the business was not included in the new charges under the Nairobi City County Finance Act. They, however, plan to lobby city politicians to have parking fees reviewed.

“We are now paying Sh6,000 per month from Sh2,000. We used to charge Sh500 from the city centre to Westlands but as it is, we will be forced to review this to Sh700 or so,” he said.

Eastleigh Business Association vice chairman Hussein Mohamed Hajj said: “The county government has brought a lot of problems. We are waiting for delivery of services but this is not happening,” said Mr Hajj.

Casinos have not been spared either with a medium-sized casino paying Sh50,000 up from Sh30,000 for its business permit. This is in addition to the 20 per cent withholding tax on winnings imposed last month but which has been suspended by the courts.

The county has also introduced a gaming tax under the Nairobi City County Betting, Lotteries and Gaming Bill 2014 currently on the floor of the assembly.  Association of Gaming Operators-Kenya chairman David Moshi said they were not consulted over the Bill.

Some market traders, however, said they had given the City Hall proposals on new levies.

“We’re still paying the old rates. We have forwarded our proposals to City Hall on what we can pay. We are only willing to pay what we’ve proposed,” said Wakulima Market Traders Association chairman Kaguta Githaiga.

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