The cost of doing business in Mombasa has risen sharply, scaring away investors, the business community has said.
The Kenya National Chamber of Commerce and Industry Mombasa chapter, Kenya Trade Network Agency and the Youth Empowerment Programme Initiative have called for dialogue between the business community, the youth and the county government to strategise on how to arrest the situation.
Speaking during the 4th annual entrepreneurship summit in Mombasa on Saturday, the business stakeholders said Mombasa is a key city that has a huge influence on the economy of the country.
The stakeholders said the taxes and other levies were way too high, making most businesses unsustainable.
KenTrade chair Suleiman Shahbal said adopting a strategy of engagement was the way to go.
“I want to have a personal discussion with the governor to explain to him the different alternatives that county governments can use,” Shahbal said.
He said it was more productive to find ways of encouraging businesses to set up shop in Mombasa than discouraging them.
He however said Mombasa county is in a dilemma and is struggling to find a balance.
On the one hand, the government has to raise revenue to run the county and provide essential, timely and proper services to the people and, on the other, it has to provide a conducive environment for businesses.
“I don’t think the intent was to chase away businesspeople. But clearly, there needs to be a change of thinking in how we do business,” he said.
Recently, the county raised some levies and taxes as contained in the Finance Bill 2019-2020.
For instance, Mombasa increased hotel licences from Sh85,000 to Sh150,000 annually, a 70 per cent increment, depending on the size and classification of the facilities.
Casinos had their operational charges raised to Sh500,000 annually from Sh100,000.
Bars with a capacity of over 60 patrons will now be paying Sh60,000, up from Sh22,500 annually.
Liquor licences for nightclubs have doubled from Sh100,000 to Sh200,000 annually.
Single business permit fees have also shot up.
“We want these fees reviewed since it is now too expensive to do business. The players are feeling the pinch and may be forced to close shop,” Kenya Coast Tourism Association executive director Julius Owino said.
Shahbal cited former US president Ronald Reagan’s policy of lowering taxes to attract more businesses in America, a decision that was laughed at.
“But today it, has become recognised and accepted that when you make a place more conducive for business by lowering taxes and making it easier, it actually brings in more business,” he said.
“So, I will definitely have this discussion with the governor and I think we will understand each other.”
KNCCI Mombasa chapter chairman Charles Msilanga said dialogue was key to finding solutions.