Kenya should rope in more taxpayers by creating incentives that encourage informal businesses to formalise operations.
Housing and Urban Planning PS Charles Hinga said small and medium enterprises, which employ about 80 percent of Kenyans, should be encouraged to register with the Kenya Revenue Authority as a precursor to doing business with public entities.
Speaking in Nairobi during the launch of Cytonn High Yield Fund, Mr Hinga said county and national governments could attract new ratepayers and taxpayers by creating an avenue for informal businesses to formalise their operations as a prerequisite to getting business.
“We forced three entities, Ngong, Kariobangi and Kamukunji Jua Kali associations to come together and awarded them a Sh122 million tender to make doors and windows for 1,370 housing units. They have since evolved into a single entity with 10,000 employees (artisans) called Ngokamka Company,” he said.
This enables local companies to build capacity and a corporate structure that enables them to compete for big-ticket jobs against moneyed foreign contractors.
“Such a company will now keep its books in order and is a platform to engage Jua kali artisans for mass housing projects within Kenya and abroad,” he said.
Mr Hinga said direct engagement with SMEs also removes middlemen from public tenders, enabling Kenyans to benefit while giving State agencies access to low-priced quality products.
Ngokamka artisans were trained and a manual prepared for their various products. This helped the different artisans come up with similar products on an industrial scale while working at their respective sites.
The new entity is now efficient and can deliver products ahead of deadline due to an efficient communication structure.
Unlike public entities that withhold payments for years, the Affordable Housing Programme attracts active local participation with banks offering to fund local enterprises to participate in housing projects.