Manufacturers warn high taxes threatening Kenya’s investment drive

Manufacturers continue to decry the high and unpredictable tax regime in the country, saying it remains a great impediment to foreign direct investment in the country.

This, as the country seeks an ambitious target of attracting USD 2 billion of investments in the country.

“We are our own enemy”: This is the perception of Kenya's manufacturers who now warn that the sector is being weighed down by heightened taxation and unpredictable policy shifts by the taxman.

Bidco board chair Vimal Shah said: “They block you, block you, block you, to just extract money. A small start-up has no hope in Kenya today because there is Ksh.100,000-Ksh.200,000 worth of licences…we have to move away from licence rush. For a start-up, there should be no licenses, one certificate, and that’s it. You start off, then once you make a certain amount of revenue, you start charging them.”

The concern comes at a time when the Nairobi International Financial Centre is racing to position the country as a regional investment hub, with an ambitious goal of attracting USD 2 billion in Foreign Direct Investment (FDI) by 2028.

Daniel Mainda, Nairobi International Financial Centre CEO, says: “What we are trying to ensure is that we create that enabling environment for it to be easier for people to have ease of doing business, and we want to increase our ease of doing from where we are to become a top 10 or top 6 in the continent by 2028.”

This, the government hopes will not only unlock foreign direct investment, but also address liquidity challenges facing the manufacturing sector.

Tertia Bailey, Manufacturing Advisor, British High Commission, noted: “We are focusing on manufacturing because a strong manufacturing sector is an important part of growing any resilient economy and creating jobs, and as we all know, there's a large number of young people hitting the Kenyan job market every year.”

“If we want to attract FDI into the manufacturing sector, we have to do one thing. We have to make Kenya competitive and we are competitive as Kenya. We have a good eco-system,” added Vimal.