Cereal traders in Nairobi County are fighting over a cess that the city has proposed to levy on all the grain entering the capital even after it was cut by 29 percent per bag.
Initially, the county government had proposed Sh70 for a bag of grain entering Nairobi, but the levy has so far been reduced to Sh50 for the same quantity.
However, stakeholders have opposed the tax even with the reduction saying that it amounts to double taxation and they want it to be scrapped in totality.
A meeting that had been organised by the county on Thursday last week to agree on the modality of payment did not yield much as the stakeholders opposed the tax. Another meeting has been scheduled on January 26.
Under the Nairobi County finance Act for 2013, all dry cereals were to pay Sh70 per bag for all the grains crossing the capital’s boundaries, leading to uproar among the traders.
“…this is therefore to remind all traders to pay Sh50 per bag for cereals brought in the county,” said Jairus Musumba, county secretary and head of public service in a letter to the stakeholders.
The chairman of the Kenya Manufacturers Association Rajan Shah says the tax is unnecessary and that it will only work towards increasing the cost of goods to consumers.
“Traders already pay tax at the point of origin where the grain is produced, paying another levy at the point of entry, which is Nairobi, amounts to double taxation,” said Mr Shah.
Mr Shah, who is also the chief executive officer of Capwell Industries, says cess was put in place to grow infrastructure at the county of origin where goods are produced but it has now lost its purpose when counties like Nairobi start collecting at the point of entry.
“The purpose of cess was to help in improving infrastructure at the point where the produce is grown so that to ensure that these commodities get to the market with ease, but now it is losing its purpose when other counties start charging it,” he said.