PM assures Kenya businessmen

May 13, 2009
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, NAIROBI, Kenya, May 13 – Prime Minister Raila Odinga has directed the Finance Ministry to move fast and finalise the Business Regulation Bill in order to ensure an improved environment for doing business.

Mr Odinga said on Wednesday that the implementation of this bill, together with the Regulatory Reform Strategy, would among other benefits help to create a competitive and predictable regulatory business environment that can attract prospective investors into the country.

“Transparent and regulatory environment provides businesses with the security and the right conditions for growth and investment as it provides certainty and predictability in business planning,” he said at a roundtable meeting with the business community.

The Bill is set to legalise the Business Regulatory Reform Unit which is mandated with the task of keeping track of all regulatory regimes, review all licenses and ensure that new polices, licenses, fees and charges do not pose any burden on businesses.

In line with this, a regulatory reforms working committee which was recently constituted has announced its intentions to launch an electronic registry of licenses (e-registry) in which the public will be able to access all information related to licenses.

The Premier said the government was relying solely on the private sector to play its part and help ease the effects of the global financial crisis on the country and as such needed to be provided with a conducive business climate that can support such a responsibility.

“We believe very strongly that the route out of the current crisis is through the private sector; that we must have the sector work and generate wealth. I know the feelings of the private sector but we must not only look at the negative side but also the positive and I’m confident that we will get out of this,” he said.

Mr Odinga also assured the business people that the issue of delayed Value Added Tax (VAT) refunds, which affect cash flow in firms, would be resolved once and for all and hinted that it might be included in the upcoming budget speech.

Without revealing the finer details, he said discussions with officials from Treasury had been held and an amicable solution reached.

“I’m not pre-empting issues here but I’m sure that you are going to get a different package in the budget that will be announced shortly. This matter is receiving very serious attention within the government circles,” he reassured.

Private sector players have complained that nothing has changed (it still takes more than 180 days to settle claims) despite a presidential directive late last year to have the refunds cleared within 60 days.

Kenya Association of Manufacturers Chairman Vimal Shah suggested that instead of having a refund arrangement, the government should have a set-off system where you can clear the VAT against your other taxes.

"It can be used as an instrument which you can trade on the Nairobi Stock Exchange and people buy that with interest. If you have an outstanding due to the Kenya Revenue Authority then there’s a heavy penalty and there’s an interest charged,” he said.

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