Safaricom bemoans high charges

Mobile phone operator Safaricom has warned of more job losses in Mombasa due to proposed high business levies.

The company’s Coast region head of operations, Fawzia Kimanthi, said the county’s single business permit, outdoor advertising fees and charges are the highest in the country.

She said the telco's retail outlets, dealers and M-Pesa outlets that employ thousands of youth had been hit hard by the current charges and the proposed ones would only worsen the situation.

Ms Kimanthi said although M-Pesa outlets are owned by low-income residents, the county currently charges an annual fee of Sh20,000 for a single business permit.

The other 46 counties, she said, charge less than Sh10,000.

“As a result of Mombasa’s hefty levies, many outlets have closed down, causing thousands of job losses,” she said.

She said the county’s approval fee for a base station site of Sh210,000 was the highest in Kenya.

The proposed Finance Bill for 2016/2017 seeks to impose higher fees on setting up ICT-related infrastructure.

In a memorandum to the county, Ms Kimanthi said the new fees would deal a major blow to plans to set up base stations and the laying of fibre-optic cables.

“We are concerned that the high fees will effectively increase the cost of network rollout and slow down the realization of Vision 2030 objectives, which are primarily ICT-related,” she added.

Safaricom, she said, is also facing another major challenge of high advertising charges being imposed by Mombasa County.

“Following the county’s increased advertising charges, it has greatly affected our advertising frequencies,” Ms Kimanthi said.

She added: “Advertising is very important to Safaricom as it is the only way our customers get to know about our products and services.”

REVENUE UP
Consequently, Safaricom has proposed that Mombasa County reduce single business permit fees for M-Pesa outlets and advertisement charges.

The mobile operator also demands that the county classify Safaricom retail shops as retail outlets and not as company headquarters.

Safaricom proposes that the county reduce the current fibre-optic cable way leave fees and base transceiver station site approval fee, and remove the annual GSM base license and mobile communications service fees.

In the Finance Bill, the county proposes to charge Sh60,000 for window stickers per annum while the first 1,000 posters placed in designated areas in the town would incur a charge of Sh40,000.

The county proposes to charge Sh15,000 for loudspeaker advertising per day, up from Sh10,000, while roadshows per truck per day would incur a fee of Sh15,000, up from Sh10,000.

The advertisement fee for wall and shop branding per year has shot to Sh75,000, up from Sh50,000, while the proposed application fees for wall branding will be Sh30,000, up from Sh6,000 in the Finance Bill of 2013/2014.

County finance executive Hazel Koitaba on Sunday said most business levies had not been reviewed since 2013.

Ms Koitaba explained that since Governor Hassan Joho took the mantle in 2013, revenue collection had increased from Sh1.3 billion to Sh3 billion in the last financial year.

She called on the business community and companies to pay the required permit fees and levies to allow the county to provide better services to the public.

“It should be noted that the county must collect revenue to be able to finance collection of garbage, roads maintenance, [and] street lighting among other services to the public,” she said.