Mombasa to impose levy on containers
A container vessel passes through the Kilindini harbour at the Port of Mombasa. The county government plans to impose levies on cargo at the port in a bid to increase its revenue collection.
The Mombasa County government has revived plans to introduce new levies on shipping containers to generate more income.
Billions change hands in the import and export trade, and the county wants a piece of the pie.
Should the proposal be adopted, the devolved unit targets to collect billions annually, considering the increase in cargo volumes at the Port of Mombasa.
Governor Abdulswamad Nassir’s predecessor, Hassan Joho, got into conflict with the national government after he introduced similar charges in the 2016/2017 financial year budget plan.
Then, the county failed to impose a planned levy of two dollars on every tonne of cargo, which would have earned the county government over $52 million a year, based on the 26 million tonnes of cargo the port handles per year.
However, Mr Nassir, who said Mombasa is the only port city globally that does not directly benefit from having such a facility, has changed tact and is engaging the national government over the matter.
In the Finance Bill 2022/2023, which is currently before the county assembly, Mr Nassir’s administration intends to charge port cess for containers per TEU at Sh1,237 ($10), and loose cargo at Sh61 ($ 0.5) per tonne. The Bill also proposes to extract Port Health charges per vessel – international at Sh123,600 ($1,000) and local at Sh2,472 ($20).
“The Port of Mombasa is good because of business for the county but at the same time, it is straining our infrastructure. The lorries that are passing there, the level of social strain that it causes, any port city in the world is bound to have some level of vices here and there and you have to look for ways to capitalise on the harbour,” Mr Nassir said.
Public participation
The county boss added that his administration has conducted public participation with relevant stakeholders on the matter. He said he recently engaged national government officials and they supported the idea.
“We are now tying it up at the ministry level to see how we can engage further for mutual growth. Mombasa has to grow, it doesn’t make much sense to have the port while grappling with drainage and drug abuse challenges. We intend to charge something that will not cause a strain on Mombasa being a preferred port city,” he added.
During Mr Joho’s administration, the national government opposed the proposed levies, saying the port is a national asset and, therefore, any legislation by a county or any other body that contravenes this constitutional provision is null and void.
At the same time, the county administration is targeting small-scale businesses to boost the port city’s economy after a study report revealed that of the 30,000 traders, only 4,000 pay taxes.
The study, conducted by the county and the Kenya National Chamber of Commerce and Industry, showed Mombasa’s economy can be boosted if the small-scale traders paid taxes.
“We have reduced levies for the small businesses to ensure they pay the taxes instead of letting them engage in corruption,” said Mr Nassir.
The county is also seeking to raise revenue from the Sh400 million Kongowea market, the largest wholesale market in the coast region. The market hosts over 5,000 wholesale traders dealing in clothes, cereals and fish, among others.
“We want to make the county a business hub through a 24-hour economy, especially at the Kongowea market, where we have installed CCTV and lighting systems to improve security,” said Mr Nassir.
Mr Nassir’s administration is eying new revenue streams to increase its revenue base including big firms, international schools, hotels and bars.