Businesses operating across county borders could get relief from multiple permits and charges under proposed reforms championed by Kenya Revenue Authority Chair Ndiritu Muriithi, who says removing the barriers would open up markets, lower the cost of doing business and give the economy a much-needed boost.
Muriithi said counties should stop treating businesses as new operators every time they cross into a neighbouring jurisdiction, arguing that traders who have already paid for a permit in one county should be allowed to operate across participating counties without facing fresh charges at every stop.
Speaking during a Radio Generation interview on Tuesday, the former Laikipia governor said counties could use reciprocal arrangements to reduce what he described as double or triple charges, allowing businesses to move goods and services more freely across county borders.
His proposal comes amid Kenya's devolved system, where county governments are responsible for trade development and regulation. The Constitution also requires counties to cooperate in carrying out their functions and powers and provides that their revenue-raising powers should not hurt economic activity across county borders or restrict the movement of goods, services, capital and labour.
Muriithi said stimulating the economy had been one of his main priorities when he served as governor, alongside improving health, security and the professionalism of the county civil service.
“I had four broad priorities, and they are related. I had a very big priority on the health side, because if you have no health, nothing else. I had a big priority on stimulating the economy itself. Like, how do we get farmers to increase to get better yields? How do we get more businesses being opened in various places, and the ones that we have are being expanded,” he said.
He said growing existing businesses and encouraging new ones was key to creating jobs and raising household incomes, but argued that such efforts would have a greater impact if traders were able to reach larger markets without being hit by additional county charges.
Muriithi recalled that during his time as governor, the Central Region Economic Bloc had begun efforts to address the issue by bringing together county officials to examine ways of removing repeated charges imposed on businesses operating across county boundaries.
“During that tenure, the Central Region Economic Bloc, we created a process, including technical staff, our CECs, our trade officers, our chief officers for trade, and so on, to look at removing the double or triple charges,” he stressed.
He gave the example of a business operating around central Kenya, where a trader could be required to pay different fees after travelling only a short distance into another county.
“If you are producing here in Thika, when you turn one direction, you are in Kiambu, so you pay a single business permit for Kiambu. When you cross just the river or whatever to sell, they come hardly a kilometre from your premises. You're talking about Murang'a now. You're in Murang'a, so you pay a distribution fee. When you reach Sagana, you're now in Kirinyaga. You pay again. When you reach Karatina, you pay,” he said.
Muriithi said counties could instead agree on a system where a business that has paid a single business permit in one participating county would be allowed to trade throughout the bloc without paying similar charges in every county.
“What we had worked out is the volume of intercounty trade, the approximate opportunity cost. What would you give up as Murang'a, Kirinyaga and Nyeri if you did not charge this? So that now it's reciprocal. When a business pays a single business permit in one county in the block, they don't have to pay any other cost in order to reduce that.”
He said the approach would give businesses access to wider markets while making it easier for goods and services to move between counties.
Beyond reducing trade charges, Muriithi said county governments could also help businesses grow by working with financial institutions to make credit cheaper for small and medium-sized enterprises.
“On the stimulus side, because there was part of it was access to finance, the commercial banks that had started in Nairobi had begun then to replicate. So, for example, KCB had already gone into Kiambu with exactly a similar programme, that we assess your SMEs, but you as county, you buy down the credit risk, so that now instead of an SME paying 13 or 14% for the money, they can pay six to seven percent for the money,” he said.
Muriithi said cheaper credit, coupled with fewer barriers to intercounty trade, could help businesses expand, create more jobs and drive economic activity.
He also called for development plans that can continue beyond individual political terms, warning that frequent changes in priorities can interfere with long-term economic programmes.
The former Laikipia governor said sustained growth would require counties to work together and maintain policies that give businesses a stable environment in which to invest, expand and reach markets beyond their home counties.