Mombasa budget plan imposes higher taxes on businesses

What you need to know:

  • An official who was involved in preparing the budget estimates said these were among the taxes and levies to be introduced in the next financial year.
  • The county, which has more than 4,000 workers has been grappling with a huge wage bill and enhancing taxes could be aimed at raising the money to pay the large workforce.
  • On the county’s spending plan, healthcare received the lion’s share of the budget with Ms Koitaba announcing last week that nine new health centres will be built at a cost of Sh221 million.

The Mombasa County Government has introduced a raft of new taxes likely to increase the cost of doing business in the coastal county, according to its new budget estimates released last week.

Among the proposed taxes is the Matatu Operators Tax which will require each matatu to pay Sh2,000 per month to the devolved government. The county also intends to introduce a garbage collection tax under which each household will pay Sh200 per month.

Business owners who run hotels, restaurants and bars will also be required to pay liquor and restaurant levies to be determined by the classes of their establishments.

The Executive for Finance in the county, Ms Hazel Koitaba, was not available to answer calls from the Nation but advised that we text her. However, she had not responded to the text messages by last evening.

An official who was involved in preparing the budget estimates said these were among the taxes and levies to be introduced in the next financial year.

“For the garbage collection fees, we shall work out a formula where private collectors like the Kenya Ports Authority, which collects the garbage from its own estates, will be exempted,” said the source who cannot be named because he is not authorised to speak on behalf of the county.

The county, which has more than 4,000 workers has been grappling with a huge wage bill and enhancing taxes could be aimed at raising the money to pay the large workforce.

Already, the proposal to introduce additional taxes has met stiff opposition from the business community.

Players in the tourism and hospitality sector were among the first to speak out against the new taxes and levies.

Mr Sammy Ikwae, the Kenya Hotelkeepers and Caterers Association county officer in charge, yesterday said much as the business community will be willing to support the county budget, extra levies should be geared towards improving service delivery.

“We are opposed to such unclear taxes like for sign posts, chicken levy, car brands, markets and others,” he said. “The taxes should be genuine and reasonable. They should be accountable and not for meeting costs of the bloated wage bill.”

He also noted that the new taxes should be targeted at businesses doing well, adding that tourism had taken a major beating and “it is expected to just starting to emerge from the ashes”.

“If anything, the tourism sector should get cushioning from the county government. Many hotels have not taken back their employees. They have not repaired broken infrastructure and are struggling to resuscitate. The taxes should wait until we have recovered,” he said.

On the county’s spending plan, healthcare received the lion’s share of the budget with Ms Koitaba announcing last week that nine new health centres will be built at a cost of Sh221 million.

“This is aimed at improving the quality of healthcare services in the County of Mombasa,” she said last week. The move is expected to ease congestion at the Coast General Hospital.

The new health centres will be built at Mtongwe, Shika Adabu, Likoni, Bofu, Mwakirunge-Marimani, Chaani, Mikindani, Magongo and Mtongwe.

In addition, the county will spend Sh60 million to buy new ambulances and Sh463 to buy “specialised materials to improve service delivery in health facilities”.

Another Sh98 million will be used to buy drugs and equipment for the health centres and to recruit medical personnel.

Infrastructure development was also allocated substantial amount to make road transport “efficient, faster and affordable”.

Sh237 million was set aside for minor roads, Sh118 million for major ones and Sh100 million to put up street lights.