11 January 2014

Kenya: COTU Expresses Concern Over High County Taxes

THE number of jobless Kenyans is set to rise if county governments continue to raise fees, taxes and rates that are driving many businesses to closure, COTU has warned.

Workers umbrella body Central Organisation of Trade Unions secretary general Francis Atwoli said yesterday that the devolved system of government is "increasingly becoming a nightmare" for most businesses terming it as exploitative.

"Today almost all county governments have raised rates by three times including land and property rates as well as the cost of business permits," said Atwoli in a statement.

"In efforts for business owners to cushion themselves against these exorbitant costs, they are now passing on these costs to the consumer including declaring workers redundant in order to remain afloat."

Atwoli's remarks come at a time when there is public concern over the expenditure of some of the county governments after it emerged that some used more money on personnel allowances, emoluments and lavish spending at the expense of development projects.

Last year, Kenya Association of Manufacturers raised the same issues adding that its members were being subjected to double taxation in some county governments and driving them out of business.

KAM's chief executive Betty Maina has previously said that the failure to streamline tax charges in counties was creating illegal trade barriers and bringing to fore the ugly side of devolution.

"Property owners in Nairobi and across all counties are not able to sustain these costs and have since passed over to workers who are now forced to incur large rental costs," Atwoli added.

COTU said that according to findings by its own research and economics department, the government will not be able to remain afloat in its current state as its financially unsustainable.

COTU now wants the number of counties reduced from 47 to eight based on the previous provincial boundaries.

Atwoli said it was "unfortunate" that tax payers are now bearing a huge burden to implement the constitution.

On Tuesday, the senate committee on devolution began drafting a bill seeking to limit the number of employees in a county government in a bid to trim recurrent expenses by counties.

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