President Kenyatta has told the National Treasury, the Attorney-General’s office and the Judiciary to develop a legal regime to waive fees for commercial disputes below Sh1 million.
The President further urged the National Treasury and the Kenya Revenue Authority (KRA) to review the tax structures, especially in relation to small businesses, in order to reduce the tax burden while fostering tax compliance.
Speaking on Thursday during the 55th Jamhuri Day celebrations, President Kenyatta said these are some of the measures that his government has put in place to accelerate economic growth.
“The three agencies should formulate a framework that will anchor the waiver of court fees for commercial disputes of less than one million shillings, effective 1st March 2020,” the President said in his address to the nation.
He noted that his administration is focused on factors that are holding back the potential of both private and public enterprises.
In particular, the President said he will focus on taxes and their administration, reduction or where possible elimination of fees or charges levied by government agencies and the private sector, reduction of bureaucracy and the simplification of processes in trade, access to credit and streamlining consumer protection.
He said he had decided to push for a waiver for court fees out of recognition that up to 40 per cent of the value of commercial disputes for claims under Sh1 million are taken up by court fees and advocates charges, thereby making the cost of recovery prohibitively high. He also wants the Advocates Remuneration Order amended to make advocates’ charges in such court cases more accessible to Kenyans. The order provides minimum fees in all legal matters including sale of land, mortgages, agreements and leases.
As a way of reducing the compliance burden on employers, the President ordered all employer contributions to the National Social Security Fund, National Hospital Insurance Fund, Pay-As-You-Earn and National Industrial Training Authority be made through a unified payroll return submitted to KRA.
He noted that the repeal of the law capping bank lending interest rates, and the introduction of financial products such as STAWI have already had a positive impact on hundreds of business by making low-cost financing available.
“In the coming months, my administration will introduce other products such as Stawisha SME Mashinani and other administrative measures geared towards SMEs to enable them to play their rightful role in our economic transformation agenda,” said the President, adding that Kenya’s ranking in the World Bank’s Ease-of-Doing-Business Index had improved to 56 among 190 economies.
Since he assumed office, Kenya has improved by 80 positions globally and remains on course to join the top 50 countries next year.
“We should be proud of our achievements. This positive change has been most felt by our Small and Medium-Sized Enterprises, who have benefited from our culture of being an open and listening government that is attuned to the needs of enterprises,” the President said.
He cited reforms in creating businesses for the “remarkable progress” in Kenya’s ranking.
The President mentioned issuing of building permits, acquiring electricity, accessing credit, paying taxes and trading across the board, adding, they had increased investment in the energy sector, embraced ICT, and stepped up war on corruption.