Mombasa County has caused fresh uproar with its proposal to raise by Sh10,000 charges on every branded container entering its territory.
In its Finance Bill 2015 currently before the County Assembly, Mombasa proposes to charge Sh40,000 per year on every branded container that runs through its territory, up from Sh30,000 being levied at the moment. Similarly, any branded vehicle will pay a yearly fee of Sh15,000, up from Sh12,000.
But transporters have criticised the planned levies saying they could raise the cost of doing business and discourage traders from using the port of Mombasa.
“It is wrong for any county to impose taxes without first talking to the stakeholders,” Kenya Transporter Association (KTA) chief executive Willington Kiverenge told the Business Daily yesterday.
“If the Bill is passed, it means that the cost of doing business will be higher and some may close down. It is not proper for them to increase the levies arbitrarily without consulting the stakeholders.”
Levy proposals by various counties has led to public outcry and stakeholders have called on the devolved governments to consult with the public before imposing new fees.
In a letter dated October last year, former Kenya Maritime Director-General Nancy Karigithu said it had come to their attention that 16 counties along the Northern Corridor had proposed new levies on cargos passing through their territories to boost their revenues.
The counties included Mombasa, Makueni, Taita, Taveta, Machakos, Nairobi, Nakuru, Uasin Gishu and Bungoma counties.
“While the Constitution accords the county governments the revenue raising powers, where the county legislation is in conflict with the national legislation on matters of economic policy, national security and economic unity and in protection of common markets in respect of goods, services, capital and labour, then the national legislation shall prevail,” Ms Karigithu argued in her letter.
Imposing high levies could discourage transporters and traders from doing business in Kenya, a move that will negatively impact the economy.
Currently, Mombasa port is facing stiff competition from the Dar port which has been undergoing expansion. Recent statistics reveal that the Tanzanian port is increasingly becoming the port of choice for traders in Tanzania, Rwanda and Burundi due to less logistical challenges and cost.
Statistics released by Mr Gichiri Ndua, Kenya Ports Authority Managing Director, while addressing stakeholders in a meeting held in Kigali February, revealed that Rwanda and Tanzania bound cargo handled by the port of Mombasa declined by 1.7 per cent and 2.4 per cent in 2014, when compared to the records of the previous year.
Cargo destined to Rwanda were 235,912 tonnes down from 240,099 tonnes while Tanzania posted 187,848 tonnes from 192,475 tonnes in 2013.