Friday, December 1, 2023

How the government killed my small bottled water business

If you want to start a small or medium business in Kenya, be prepared for a rough ride. Your own government will do all it can to make sure that it runs you out of business.

The cost of doing business, the endless taxes and levies will make sure that your business does not survive.

This is exactly what the experiences of a few entrepreneurs who have come out to share their misfortune in the hands of government shows.

Take Ndoria Stephen. He mobilized a group of about 100 people to start a bakery. They took a loan of Sh. 3.5 million to buy equipment. “KEBS, NEMA, and Kenya power frustrated us out of business. We had 10 direct employees. Don’t try SME if you aren’t well connected and can’t steal power,” he said.

How Sh. 200,000 can give you Sh. 1 million within two years

Ndoria is not the only one. In September, Faith Mutembei shared how her bottled water startup, Mountain Brooke Drinking Water, went under due to heavy taxation and levies from the government. She narrated:

“You will no longer see Mountain Brooke¬†drinking water on your favourite supermarket counters.Sad yes,but it’s the reality on the ground.

Doing Business in Kenya

This is how punitive doing business in Kenya is:- A water Refill and Packing Station and these are the licences and taxes.

1. County Single permit License 18,500/-
2. Public Health Licence and Testing 13,000/-
3. KEBS certification 102,000/-
4. KRA Custom Excise Licence 50,000/-
5. KRA Custom Excise Bond 300,000/-
6. KRA Custom Excise Stamp Minimum 50000/-
7. NEMA License 33,000/-
8. Mandatory Independent Testing Lab and MOU 15,000/-

9. There is 0.5% of Monthly turnover Standards Level tax.
10. Not forgetting the Ksh 5.47 excise for every litre of water sold.

That’s NOT All: Each county requires you to have a distribution license charged annually… If you sell your water in five counties you have to obtain licenses from each, which can go up to Sh. 50,000 in some counties. Public health licenses not withstanding. Surely doing business in Kenya is almost criminal!

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