world’s most expensive places to live in
that rapid increase in consumer good
prices linked to new taxation measures
propelled the Kenyan capital to the top
spot on the continent, ahead of Côte
d’Ivoire’s Abidjan.
Although it dropped one position from
last year’s global ranking to position
73, it adds that Nairobi’s emergence
as Africa’s most expensive city should
catch the attention of Kenya’s policy
makers, especially over its possible
impact on the quest to become East
Africa’s commercial hub. The ranking,
which is based on the cost of living, is
important because it determines a city’s
ability to attract and retain foreign
investment, expatriates and tourists.
The custodian of Kenya’s taxes has
failed in some ways. In regards to
VAT returns, The KRA has been
performing poorly starving businesses
of their much needed re-funds.
Like in Petition No. 476 Of 2013
Tata Chemicals Magadi Limited vs
Commissioner Of Domestic Taxes
(Large Taxpayers) … The petitioner
was suing for delayed VAT refunds
that were hindering business citing
Article 47 of the Constitution which
provides, in part, that; 47. (1) Every
person has the right to administrative
action that is expeditious, efficient,
lawful, reasonable and procedurally
fair. (2) If a right or fundamental
freedom of a person has been or is
likely to be adversely affected by
administrative action, the person has
the right to be given written reasons
for the action.
The judge ruled that KRA must
always be cognizant of the possible
ramifications of its actions or
omissions in dealing with taxpayers,
and the impact on investment,
revenue collection and the general
welfare of the country. This can be
used to pursue delayed VAT refunds
thus when a company has a case
of delayed returns or fears that the
retained returns will be detrimental
to their business they can use the case
examples to prove their cases.
Registration
Registering a business is an arduous
and tasking process that is expensive
because of hand greasing on top of
the required fee. As noted before
on the Ease of Doing Business, it
could take you a solid month to have
your business name registered in the
country, compared to an average of 3
days in Rwanda!
While other countries have embraced an
online platform for business registration,
our Registrar of Companies, as per 2016,
is sticking to the old manual model.
The sluggishness of paper work perhaps
explains the inefficiency of the process, and
the myriad corruption accusations, where
potential businesses that pay an ‘extra’ fee
get serviced faster than the average lot.
Now the government has established
Huduma Centers to try and
remedy this. According to available
information, Huduma Kenya is a
programme by the Government
of Kenya that aims to transform
Public Service Delivery by providing
citizen’s access to various Public
Services and information from One
Stop Shop citizen service centers
called Huduma Centers and through
integrated technology platforms.
Huduma Centers Kenya provides
Efficient Government Services at the
Convenience of the citizen.
Huduma Kenya is a ‘one stop shop’
approach in reforming service delivery
in Kenya. Huduma Kenya involves
amalgamating related services within
one building, possibly on the same
floor. Administratively this has made
business easier to carry out and this
can be an ideal place to turn to.
Competition
The regulation on competition has
not been thorough, hence we have
undercutting and also monopolies
and cartels thriving. The Competition
Authority (CA) is a state organ
established under Section 7 of the
competition Act (Cap 504) Laws of
Kenya (the Act). Its mandate includes
advising the government on matters
relating to competition and consumer
welfare as well as carrying out research
inquiries and studies in matters relating
to competition and consumers.
CA can be used to monitor and weed
out unfair competition. The enterprises
can always engage the Authority if
they believe some unscrupulous traders
are dealing unfairly. Safaricom has
actually been challenged for alleged
monopolistic tendencies in Kenya
and has had to review some of its
undertakings.
Counterfeited And Fake Products
Companies have been brought to
their knees over importation and
manufacturing of low standard cheap
and or counterfeited products. This has
been the case of Eveready Batteries
where importation of imitation and
counterfeited products at a far much
cheaper pricing has gone on to undercut
the once thriving business which is now
seemingly on its death throes.
A case in point to show this is in
paper provisioned for in Misc. Civil
Application No. 35 Of 2014 Republic vs
Hon. V. J. Yator. The ex parte applicant
was charged in the Chief Magistrate’s
Court Criminal Case No. 64 of 2008
with two counts, respectively, for being
in possession of uncustomed goods
contrary to section 200 (d) (iii) of the
East African Community Customs
Management Act and for being in
possession of counterfeit goods contrary
to section of 32 (a) of Anti-counterfeit
Act No. 13 of 2003.
George Gathu is a Part time student of
Msc (Entrepreneurship and Innovations
Management) at the University Of
Nairobi and works as a Sales Consultant
at Allclusive Solutions. For further
discussion on this and more you can
reach him via email at: GGathu@
allclusivesolutions.com