Traders have called on the government to reduce taxes, saying high taxation significantly hamper business operations and stifle growth.

The recently released Stanbic Bank Africa Trade Barometer 2024 highlights this sentiment, with businesses identifying heavy tax burdens as a leading obstacle. Tax relief, they argue, would alleviate these financial strains, enabling smoother operations and enhanced engagement in trade.

The report reveals that 81 per cent of surveyed businesses see reduced business taxes as a crucial government intervention to support cross-border trade.

Other top priorities include minimising customs clearance times and improving foreign currency liquidity, all of which would enhance trade efficiency and competitiveness.

“Businesses identified the reduction of business tax, reduced time taken for customs clearance, and improved foreign currency liquidity as the three most important interventions they require from the government,” the report states.

Measures inflate costs

Despite these calls for tax relief, the Treasury recently signalled intentions to reintroduce several contentious tax provisions from the rejected 2024/25 Finance Bill.

These measures would potentially inflate costs for traders, especially those involved in import-export activities, by taxing transactions that previously enjoyed favourable treatment.

This as investors in Kisii County voiced their frustrations over these tax increases. Investor Richard Mwebi said that escalating taxes are forcing businesses to shut down or relocate to neighbouring countries with lower tax rates and more favourable business climates.

“Some investors have relocated to our neighbouring countries where taxes are low and the investment climate is favourable,” Mwebi stated, highlighting how these dynamics slow economic growth and job creation.