The President of the Kenya National Chamber of Commerce and Industry (KNCCI), Dr. Erick Rutto, has raised alarm over what he describes as punitive and excessive levies imposed on entrepreneurs seeking to establish businesses in Kenya. According to Dr. Rutto, the regulatory environment marked by numerous certifications and licenses from various government agencies, regulatory bodies, and county governments is discouraging both local and foreign investment.
Speaking during a recent event, Dr. Rutto cited a case study of a food processing company intending to set up operations in Kajiado County. The company, with a workforce of between 30 and 50 employees, is required to obtain 20 different clearances costing over Ksh.337,000 before commencing operations. Among the mandatory charges are a Ksh.34,000 Kenya Bureau of Halal Certification (valid for just 12 months), a Ksh.58,000 Kenya Bureau of Standards permit, and a Ksh.50,000 food and hygiene license. On top of these, the Kajiado County government demands a Ksh.13,000 unified business permit.
“These are extremely punitive trade barriers that we must do away with as a country,” Dr. Rutto remarked. He emphasized the need for streamlined procedures, proposing a single unified business permit valid across all counties to reduce the bureaucratic burden on investors.
Dr. Rutto noted that despite Kenya having a pool of highly skilled and innovative workers and entrepreneurs, the steep cost of regulatory compliance remains a major barrier to entry into the formal business sector. To mitigate this, he proposed a phased tax policy, including a two-year tax holiday for startups.
“This approach will give young businesses time to stabilize and grow. By the sixth year, when they are well established, the government can step in,” he suggested. “This would encourage formalization, increase the tax base, enhance competitiveness, and diversify our economy.”
The KNCCI president’s call comes amid growing concerns from the business community over Kenya’s regulatory complexity, which many believe is stifling innovation and entrepreneurship.
