Listen to Nairobi traders' concerns over taxes

Audio By Vocalize

Hundreds of traders in Nairobi on Friday last week held demonstrations in Nairobi to protest a tax increase that they fear could decimate their businesses.

The government, in its characteristic nature, responded by unleashing police officers who lobbed tear gas canisters on the protesters from Kamukunji, Gikomba and Nyamakima markets.

The assault on protesters who were peaceful and by all means, had very genuine grievances, was totally unwarranted.

The traders were angry because of Kenya Revenue Authority's (KRA) unilateral decision to raise the minimum tax yield for a 40-foot container of consolidated general cargo from Sh2.5 million to Sh3.2 million.

They have a good reason to be concerned. By the time President Uhuru Kenyatta was leaving office in 2022, the traders were paying Sh1.7 million in taxes for the same container. Then came in the Kenya Kwanza administration and the figure was raised to Sh2.5 million and then now to Sh3.2 million. A total increase of Sh1.5 million in four years.

Such a move was obviously bound to raise questions, especially during the current difficult business environment.

The KRA says it revised the tax after considering changes in exchange rates, freight costs and national and East African Community tax laws. But does the agency have watertight evidence that these traders, especially those who import low-value products, can pay these taxes and still make a profit?

The traders say they cannot afford to and the move could drive them out of business.

We cannot take their concerns for granted. Similar manoeuvres by Uhuru Kenyatta's government stifled the same businesses, causing many traders to close their businesses. In addition, many companies have either closed shop or relocated abroad in the past few years due to over-taxation that rendered their businesses unviable. In both these cases, the government turned a deaf ear to the entrepreneurs or derisively dismissed their concerns.

If the government cares about the protesting traders and national economy, it should sit down with them and listen to their grievances. Ordering their tear gassing is extremely insensitive. It is killing the goose that lays the golden egg.