Gakuya protests steep taxes on hawkers, entry of Chinese traders in Nairobi

Embassy North MP James Gakuya has voiced his discontent over the Kenya Revenue Authority's (KRA) updated customs valuation standard, cautioning that the modification could negatively impact small-scale merchants who are already grappling with high operational expenses. Gakuya labeled the rise in the baseline for general containerized cargo from Ksh2.5 million to Ksh3.2 million as "inhumane and ill-advised", asserting that it would impose an extra weight on enterprises at a time when many Kenyans are enduring financial hardships.

He contended that the "sudden surge in taxes" could harm modest businesses, particularly hawkers and other informal vendors operating in Nairobi's Central Business District. Gakuya asked, "What is the responsibility of a democratically elected government if it cannot safeguard the business community, especially the small-scale ones who predominantly consist of the youth and single parents?

Who else will be able to do that?" He challenged KRA to interact more closely with the business community before enacting measures that affect traders. "No government globally has bolstered its economic standing by imposing heavy taxes on its citizens," he remarked. KRA raised the baseline for general containerized cargo from Ksh2.5 million to Ksh3.2 million, marking a 28% increase.

The Authority clarified that the new figure does not imply every imported container will inherently be assessed at that amount. Rather, the benchmark will act as a reference point for customs agents when determining whether importers have accurately declared the value of their goods and paid the requisite customs taxes. The Authority stated that the Ksh3.2 million figure aims to establish a more predictable and equitable framework for customs valuation while addressing issues of the abuse of cargo consolidation methods.

KRA also noted that the revised benchmark was introduced following discussions with the Kenya International Freight and Warehousing Association and representatives of small traders. Gakuya further criticized the increasing presence of Chinese nationals in Nairobi's retail trade, arguing that amplified competition from foreign merchants could further squeeze local businesses.

He implored the government to establish clear constraints on the industries in which foreigners, especially those from outside the East African Community, can engage. "Recently President William Ruto permitted Chinese traders to inundate the retail sector, an area where the indigenous trader has been struggling to make a dent," Gakuya stated.

The MP called for a public dialogue on the sectors where business should be open to foreign investors. "While we want to attract foreign direct investment, we must have restrictions in the areas where they can invest. We must support our own, we must foster our own," he argued. He contended that foreign investment should supplement, not supplant, local entrepreneurs.

Gakuya also criticized the management of traders who protested the new customs measures, accusing police and Nairobi County Government officials of using excessive force against demonstrators marching towards Times Tower, KRA's headquarters. He described the alleged response as "brutal force from government-backed goons organized by the State and the Nairobi City County".

Gakuya stated that traders in Nyamakima, Kamukunji, and Gikomba were likely to be affected by the revised customs valuation benchmark, potentially impacting over 100,000 hawkers. He urged the government to reconsider policies that could further burden small businesses and instead engage with traders before implementing measures that affect their livelihoods.