Blog Archive

Monday, February 26, 2007

Fees, costs & Taxes

The government continues to hinder development by pandering to special interests as well as its short-sightedness... That said, I would like to say that some silly fees/permits were rescinded by the current government... One of these was a permit fee on bicycles! In a country racked by poverty, why did we have such a fee?

Please let me know what other fees/costs that you feel should be eliminated...

  • Stamp Duty - Share Capital
  1. Why should we pay Stamp Duty on the Share Capital of a firm?
  2. We should encourage more firms to incorporate by waiving or better ELIMINATE stamp duty!
  3. We have stamp duty on various transactions that are unnecessary e.g. share purchases & sales. We pay fees to the CMA which is a government organisation. Shareholders pay taxes through Corporate Taxes (30%) as well as 5% withholding tax on dividends.
  • Lawyer Fees - Loans
  1. I had posted earlier on this topic. Why should the government/judiciary mandate what attorney fees should be?
  2. In the USA, many banks & mortgage use programs to create the documents. These are generally standard documents which can be reviewed by a lawyer. The costs of buying a $100,000 house in USA is much lower than Kenya!
  • Stamp Duty - Cheques
  1. We should encourage a shift from the cash economy to cheques & electronic payments but there is a fee payable on cheques!
  • Taxes - Petroleum Products
  1. Taxes account for 60% of taxes on petroleum products. This encourages smuggling & "diversion" of petrol tankers.
  2. Many of the "independent" petrol stations sell "diverted" petroleum products. Furthermore, this encourages an underground economy in adulterated petrol.
*** Some (unsolicited) advice - Don't try & save KShs 2-3 per liter on petrol from these independents. I know money is tight but the long-term damage to the car's engine & performance in much higher!

We have numerous taxes/fees/costs that are "hidden" but they add up for the final consumer as the businesses pass them on to us. We need to be aware of these costs. We need to lobby for their elimination.

Taxes are the price we pay for a civilised society (Some famous guy said that...) but some of these are archaic & counterproductive. It behooves the investor community to lobby for the elimination of these onerous taxes.


Prousette said...

The TV & radio permit that you had to pay for on purchase until very recently should be scrapped.I do not know if it is still there, its time must have passed.

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