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This week, the counties of Mombasa and Kilifi implemented a contentious ban on the trade of muguka, a stimulant leaf popular in Kenya. 

Our analysis reveals that this prohibition could have far-reaching economic and social consequences, potentially costing farmers up to Ksh1 billion per month and slashing over Ksh300 million from the revenue streams of both Mombasa and Embu counties.

While it is impossible to put a price on the lives of Kenyans, the ramifications of Mombasa’s muguka ban extend beyond health concerns. 

The financial fallout is poised to affect service delivery and livelihoods in both counties. 

Over 2,000 traders in Mombasa now find themselves in limbo, while more than 65,000 farmers in Embu are scrambling for alternative markets for their produce.

Embu Governor Cecily Mbarire, on May 24, highlighted that the muguka sector generates approximately Ksh22 billion annually. 

Our in-depth investigation indicates that Mombasa alone accounts for Ksh12 billion of this total revenue. This points to the critical role Mombasa plays as a market for muguka.

Historical data reveals that in 2019, five canter lorries of miraa and muguka entered Mombasa daily. As of May 2024, farmers from Embu and Kirinyaga are delivering 36,000 kilogrammes of muguka to Mombasa each day. 

Traders and transporters packing muguka into a car for transport, May 2024.

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Governor Mbarire

According to a recent health committee report, about 31.4 per cent of Mombasa's residents, primarily aged between 19 and 44, are regular users of muguka. 

This demographic represents Kenya’s most productive age group, highlights the potential societal impact of the ban.

Mombasa, with a projected population of 1.3 million, has approximately 393,000 muguka users. The city has emerged as the largest market for muguka in Kenya, providing significant daily revenue to farmers.

Mbeerembu Miraa Cooperative Union chairman Jervasius Nyombyekoth estimates that farmers earn Ksh10.8 million daily from Mombasa, translating to Ksh3.63 billion annually and Ksh302 million monthly.

Our analysis reveals that farmers could lose up to Ksh1 billion monthly due to the ban. 

This figure is derived from the daily delivery of 36,000 kilogrammes of muguka to Mombasa, with prices ranging between Ksh500 to Ksh1,000 per kilogramme.

 On the higher end, this volume translates to over Ksh1 billion monthly revenue, a significant economic driver for the farmers.

To contextualise, Ksh1 billion is comparable to the amount the Ministry of Health allocated this week to procure a year’s supply of vaccines for infants. 

It also represents nearly a third of what some counties receive in equitable share allocations. Thus, the ban’s economic impact is substantial.

The ban is also set to cause a significant dent in Mombasa’s revenue collections. 

Reports indicate that over 2,000 individuals are involved in the muguka supply chain in Mombasa, including wholesalers, retailers, and transporters. 

The county stands to lose over Ksh336 million in cess from muguka imports alone, not accounting for parking fees and additional cess collected from traders.

Governors Cecily Mbarire and Abdullswamad Sherrif Nassir during a meeting to iron out issues around muguka in Mombasa County.

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Governor Mbarire

Despite recent negotiations that led to a reduction in licensing fees for miraa and muguka dealers, the ban was enforced. 

A three-tonne lorry previously paid Ksh30,000, a pick-up Ksh20,000, and a handcart Ksh10,000. Additional charges included Ksh1,500 per box and Ksh1,200 per sack of miraa.

In Embu County, Governor Mbarire anticipates a loss of over Ksh13.2 million in revenue collections. 

This figure is based on the monthly collection of Ksh1.1 million from over 3,000 traders in 2023.

Muguka cultivation, involving 65,000 farmers, is a critical income source for the region, second only to coffee and tea. Individual farmers can earn up to Ksh30,000 weekly from muguka sales.

The Embu county government has invested over Ksh60 million in supporting muguka farmers and traders. 

The ban’s implementation in Mombasa, initiated under Governor Abdullswamad Sherrif Nassir, comes amid rising concerns over mental health and substance abuse linked to muguka use.

With Kilifi County also banning muguka and other coastal counties considering similar measures, the future of the crop remains uncertain. 

The widespread economic and social impact of these bans could reshape the livelihoods of thousands and alter the financial landscape of entire regions.

A photo collage of Miraa (left) and Muguka.

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Labour and Social Protection Cabinet Secretary Florence Bore on Tuesday announced that eligible Kenyans would be able to start applying for Inua Jamii funds starting May 21. 

Successful applicants will be receiving Ksh2,000 every month from the national government starting from June 2024. 

The registration drive targets to register an additional 500,000 households to the existing 207,000 recipients. 

“Household registration for Persons with Severe Disabilities Cash Transfer (PWSD-CT) and Orphans and Vulnerable Children (CT-OVC) is starting tomorrow Wednesday, May 22,” the CS stated. 

Elderly Kenyans awaiting Inua Jamii services in Kiambu County on April 14, 2018.

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Inua Jamii

“Similarly, account opening for older persons will also start on the same day.”

How to Apply

If you are a senior citizen aged 70 or  PWSD, you can enroll by dialing *222#.

The USSD code will then give you social protection services offered by eCitizen including; Government of Kenya flood relief, Inua Jamii, Housing and Tax Payment. 

After selecting Inua Jamii you will be prompted to select preferred language between English and Kiswahili. 

After choosing the language you are conversant with, you will then be asked to press 1 to enroll on the Inua Jamii programme. 

“Your name and ID will be checked against the Government of Kenya records,” the service will indicate after pressing one. 

Should you accept the aforementioned terms and conditions, you will then be required to confirm your mobile pin.

“Please note that the Directorate of Social Assistance has full rights to approve or reject your request for access,” Kenyans registering are advised

Kilifi County Elders during Inua Funds meeting with President William Ruto on September 28, 2018

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William Ruto

Taglines

• Kenyans working for extraterritorial organisations, like the UN, are the top earners with an average annual salary of Ksh4 million.
• County government employees earn more than those employed in national government ministries.
• The average monthly salary of teachers is Ksh60,000.
• The public sector average earnings rose by 12.1 per cent

The Kenya National Bureau of Statistics (KNBS) revealed some of the country's top-paying public and private sectors.

As detailed in the Economic Survey 2024, eight sectors paid their employees Ksh1.8 million and above in 2023.

Notably, the top-paying sector was extraterritorial organisations and bodies. Employees in this sector earned an average of Ksh4 million in 2023. This translated to a monthly salary of Ksh333,000.

Additionally, Kenyans employed in the public sector for accommodation and food activities were the second highest-paid employees with an annual income of Ksh2.8 million.

An undated image of United Nation's Headquarters in New York, US.

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UN

The public transport sector was also among the sectors with top-paying jobs. The report put the annual salary at Ksh2.4 million. The counterparts in the private sector earned Ksh1.6 million in 2023.

On the other hand, employees in private companies dealing with electricity, gas, steam and air conditioning supplies earned an average of Ksh2.3 million.

Likewise, Kenyans engaged in financial and insurance activities were also offered jobs with lucrative salaries. On average, those in private practice earned Ksh2.2 million. Their counterparts in public practice earned an average of Ksh1.5 million.

Meanwhile, medical practitioners working in government institutions also topped the top earners' list with annual average salaries of Ksh1.8 million.

The other two top-paying private sectors were administrative and support service activities (Ksh1.8 million) and professional, scientific and technical activities (Ksh1.6 million).

"Annual average earnings in both public and private sectors rose by 22.6 per cent over the five-year period. The public sector average earnings rose by 12.1 per cent compared to a 27.5 per cent increase in the private sector over the five-year period.

"In the private sector, employees in Other service activities recorded the highest increase in average earnings of 39.4 per cent, while average earnings of employees in Accommodation and food service, activities registered the lowest increase of 10.7 per cent in the
five-year period," read the report in part.

The report also outlined the salaries paid by ministries and top government institutions as detailed below;

For instance, Kenyans employed in state corporations earned an average of Ksh1.3 million. This translates to Ksh108,000 per month.

County government employees earned an average of Ksh896,000 in 2023. This translates to a monthly salary of Ksh74,000.

On the other hand, employees in government ministries earned an average of Ksh63,000.

An average teacher's monthly income from the Teachers Service Commission (TSC) was projected at Ksh60,000.

The Kenya Universities and Colleges Central Placement Service (KUCCPS) on Tuesday, May 21, released university and TVET placement results for 2023 KCSE students.

According to the report released by CEO Agnes Wahome, 134,743 students were placed in public universities to pursue various degree programmes.

Over 18,000 students were also placed to pursue degree courses in private universities.

KUCCPS Chief Executive Officer Agnes Mercy Wahome

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KUCCPS

Wahome also revealed that more male students who sat for their national examinations in 2023, applied for degree courses at the universities.

Conversely, more female students applied for degree programmes at TVET institutions.

"85 per cent of 2023 KCSE candidates with C+ and above made applications where 76.2 per cent opted for Degree courses while the rest opted for Diploma (11,991).

"Bachelor of Education attracted the highest number of applicants. Male applicants continued to dominate placement to Degree programmes, sustaining a trend that has been observed since the beginning of the central placement system," the CEO revealed.

How to Check

To check placement results, university students should log into the students portal: students.kuccps.net.

Log-in requirements include the applicant’s KCSE Index Number, the applicant’s KCSE year and the password.

Once students log in to their accounts, they will be informed of the learning institutions where they have been placed and the courses they have been selected to undertake on the dashboard.

No charges are enforced in checking results on the portal. One only needs to have data bundles or be connected to the internet through a Wi-Fi connection.

"KUCCPS congratulates all the candidates whose placement report has been released today. Log in to students.kuccps.net to check the details of your university and college placement," KUCCPS stated.

A photo of the University of Nairobi Main Campus

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University of Nairobi

The National Transport and Safety Authority (NTSA) has listed various documentation that is required to facilitate the transfer of vehicles that banks and auctioneers have auctioned for loan and rent arrears.

Below is the detailed list of documents Kenyans ought to produce for the vehicle bought through the two auctions.

Vehicles Repossed by Banks

Kenyans who purchase vehicles that banks have repossessed ought to produce a certified copy of the auctioneer's license and the auctioneer's registration certificate.

The display of the integrated NTSA -Ecitizen platform.

Kenyans.co.ke

Additionally, NTSA required one to present the KRA PIN for the auctioned vehicle, tender documents for the tendered motor vehicle and a letter of instruction issued by a financial institution appointing the auctioneer.

A certificate of sale, original purchase receipt, discharge letter from the bank, official letter for request of transfer, original registration certificate, and certificate of incorporation for the bank and auctioneer are also required to facilitate the transfer.

Other documents are the KRA PIN for an auctioneer and the bank, a letter from the Bank showing the highest bidder, sworn affidavit by the institution auctioning, a sworn affidavit by the applicant, a tape lift from DC and the transfer form.

Further, the applicant also needs to provide a copy of the advertisement that announced the auction.

Cars Bought on Rent Auctions

For this category, NTSA noted that the applicant needs to present 13 documents including a request letter written by the new owner.

Other documents are an original logbook or police abstract, properly filled Form C stamped by the auctioneer, tape lift from the DCI and a sworn affidavit from a magistrate or Advocate.

The new owner also needs to provide a copy of their ID Copy of ID & KRA PIN including those of the previous owners.

A certificate of registration and KRA PIN of the company, a copy of the auctioneer licence and registration certificate, a certificate of sale and a copy of the vesting order are also required.

On the other hand, NTSA also requires one to present a newspaper advertisement on the auction of the vehicles.

A  warrant of attachment of movable property and warrant of sale also needs to be included in the application.

Process on E-Citizen 

• Log into your E-Citizen account
• Select NTSA Service Portal 
• Go to services and select alternative/forced transfer
• Fill in the required information, and select the type of alternative transfer
• Attach original clear coloured scanned documents combined as a single PDF file
• Indicate the collection centre and the ID number of the authorized person to collect the logbook, then click on submit.
• Make payments for the transfer application and inspection services.
• Wait for the 7-day standstill period for process verification.
• Log in to your account and view the inspection booking prompt under notifications. Select the preferred centre and date.
• Present the vehicle for inspection.
• Present the original documents to the identified logbook collection centre.
• Upon approval, a notification shall be sent to the new owner

An undated image of vehicles at a yard for sale.

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KPA

The government is seeking to introduce a new levy for manufacturers and importers which is aimed at protecting the environment.

As proposed in the Finance Bill 2024, the Eco Levy targets goods that are deemed to negatively affect the environment.

"There shall be a paid levy to be known as the Eco Levy on the goods specified in the Fourth Schedule manufactured in Kenya or imported into Kenya," read the Finance Bill in part.

Here is the detailed breakdown of the tax, the goods targeted, and how it will be paid

A photo of a phone user inserting a pin on their mobile phone during the registration of Hustler Fund on November 30, 2022.

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Ministry of Cooperatives

Goods Targeted

As highlighted in the Finance Bill 2024, which stipulates the tax measures that will finance the 2024/2025 Budget, the levy will be imposed on goods that contribute to noise, soil and air pollution.

One notable product that will be affected is mobile phones, especially smartphones. Another commonly used item set to be affected by the levy is diapers.

Microphones, loudspeakers, earphones, monitors, projectors, ATMS, calculating machines, with cash registers among them.

Rubber tyers used in vehicles, motorcycles, and bicycles will also be levied.

Also included are batteries or dry cells and plastic packing bags.

Levy Charges & Payments

The levy will be imposed at rates ranging from Ksh98 to Ksh1,800 per unit.

For instance, smartphones were listed under products set to have the levy charged at Ksh225 per unit. Levy for rubber tyers was proposed at Ksh1,000 per unit.

Levy for diapers will be charged at Ksh150 per kilogramme. On the other hand, plastic bags will be charged at Ksh150 per kg.

"The eco levy shall be paid to the Commissioner at the rate specified in the Fourth Schedule in the case of imported goods, by the importer at the time of entering into the country" proposed the Bill in part.

Impact

Given that manufacturers and imported will be paying more for their products, the prices of the goods will shoot up as business owners push down the additional costs to the consumers.

Notably, the Eco Levy is not a new tax in the continent. For instance, Ghana imposes the Eco levy on imported electronic devices and rubber tyres.

In the West African Country, the levy is charged between Ksh788 and Ksh3,155.

Other countries with environment-friendly taxes include Seychelles, Switzerland and Liechtenstein.

Presidents William Ruto and Nana Akufo-Addo during a Ghana state banquet, April 3, 2024

PCS

The National Treasury is set to introduce a raft of new taxes as President William Ruto's administration seeks to raise additional revenue to finance its projects and operations heading into the next financial year.

From motor vehicle tax to digital content tax, the government will widen the tax bracket culminating in more pain for taxpayers.

The measures, published in the Finance Bill 2024, will be tabled in Parliament for the legislators to discuss the amendments which are likely to face opposition from Azimio lawmakers.

Kenyans.co.ke takes a look at five taxes and how they will affect the taxpayer:

Treasury CS Njuguna Ndung'u speaking at the Investors conference during the 2023 Annual WB/IMF meetings, in Morocco on October 16, 2023

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National Treasury

Motor Vehicle Tax

Motorists were targeted in the new wave of tax reforms after the Treasury proposed the motor vehicle tax. This is the amount a motorist pays at the time of acquiring insurance cover.

Car owners could be taxed as low as Ksh5,000 for the service and a maximum of Ksh100,000 depending on the car's value.

The tax rate was set at 2.5 per cent of the vehicle's value which will be determined by the engine capacity, model and year of manufacture.

Ambulances, vehicles driven by government officials and diplomatic personnel will be exempted from these charges.

Minimum Top-up Tax

This tax bracket is reserved for multinational firms with a gross (consolidated) turnover of Ksh106 billion.

The amount will be calculated at 15 per cent of net income minus the actual tax rate, multiplied by excess profit.

Several public entities will, however, be exempted from paying the taxes.

Economic Presence Tax

This will be a tax payable by a non-resident whose income is derived from a business carried out on a digital marketplace.

According to the bill, a digital marketplace means an online platform that enables a person to sell or provide goods, property or services including ride-hailing services, food delivery services, freelance services, professional services, rental services and task-based services among others.

Those supposed to pay the tax shall be required to pay 20 per cent of the gross turnover. The business owners shall submit the returns before the twentieth day of the month.

Withholding Tax

The bill seeks to introduce withholding tax on goods supplied to public entities at a three per cent rate for residents and five per cent for non-residents.

Withholding tax is income tax paid to the government by the payer of the income rather than by the recipient of the income. It is deducted at source.

The tax provision will also include those making online payments.

Digital content Tax

This will involve digital content creators submitting a percentage of their earnings in tax. Treasury is seeking a 20 per cent tax for those operating digital platforms or monetising digital content for non-residents and five per cent for residents.

The bracket for online services was expanded to include ride-hailing services, food delivery services, freelance services, professional services, rental services and task-based services. 

KRA offices in Nairobi.

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Kenya Insights

On Saturday, May 11, the government published the National Finance Bill 2024 which proposed various tax measures to be implemented in the upcoming financial year.

The Finance Bill also lists various transactions where Kenyans are required to produce their Kenya Revenue Authority (KRA) PIN.

Among them is the registration of an employee who works remotely outside Kenya for an employer in the country.

Here are the 16 transactions where a PIN is needed as categorised below;

Times Towers in Nairobi which houses Kenya Revenue Authority’s head office. The photo was taken on Thursday, February 20, 2020.

Kenyans.co.ke

Business

As listed in the Finance Bill, one needs to have a KRA PIN during the registration of a business name and a company.

Trade licensing, importation of goods, customs clearing and forwarding are also some of the transactions that will require an individual to have a PIN.

Business individuals who make supplies to government ministries and agencies are also required to have a KRA pin. On the other hand, business owners who seek to register a mobile cellular Pay Bill and Till Numbers need the KRA PIN. 

Carrying out business over the internet or on an electronic network including through a digital marketplace is also listed among the 16.

Household

For starters, should an individual seek to open an account with financial institutions such as banks, the KRA PIN will also be needed.

Other transactions when the PIN will be required include during the registration of titles and stamping authorities and during the payment of deposits for Kenya Power electricity connections.

On the other hand, the PINs need to be provided when one is seeking approval of development plans and during the payment of water deposits.

Additionally, Kenyans who have purchased cars and are seeking to register the vehicles have to provide their KRA PINs. The PINS are also required during the transfer of motor vehicles, and licensing of motor vehicles.

Professional

For professionals who belong to various professional bodies, the PIN needs to be provided during registration or renewal of membership.

An undated image of vehicles at a yard for sale.

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KPA

Here is the list

• Registration of titles and stamping of instruments.
• Approval of development plans and payment of water deposits.
• Registration of motor vehicles, transfer of motor vehicles, and licensing of motor vehicles.
• Registration of business names.
• Registration of companies.
• Underwriting of insurance policies.
• Trade licensing.
• Importation of goods and customs clearing and forwarding.
• Payment of deposits for power connections.
• All contracts for the supply of goods and services to Government Ministries and public bodies.
• Opening accounts with financial institutions and investment banks.
• Registration and renewal of membership by professional bodies and other licensing agencies.
• Registration of mobile cellular pay bills and till numbers by telecommunication operators.
• Carrying out business over the internet or an electronic network including through a digital marketplace.
• Registration of a trust.
• Registration of an employee working remotely outside Kenya for an employer in Kenya.

Taglines

• Kenya signed its first Double Taxation Agreement with Zambia in 1968. 
• 14 Countries Have Signed DTAs with Kenya and are in Force.
• 15 Countries Are Still Considering the DTA. 

Since taking office, President William Ruto's administration has been in the process of overhauling the tax regime by eliminating double taxation for Kenyans in the Diaspora.

The tax principle involves paying taxes twice on the same source of income. This means that one is taxed in two different countries; their country of residence and home country and can occur at the corporate level and/or at an individual level.

In April, President Ruto ordered the Ministry of Treasury to overhaul the country's taxing space to enable a better working environment for those working abroad.

"All you need to do is to file your return and state what you have paid and we will give you a tax credit for what you have paid so that you do not pay taxes twice," President Ruto stated during a meeting with Kenyans residing in Ghana on April 2, 2024.

As such, the National Treasury has been spearheading the process, seeking to eliminate double taxation with neighbouring and global countries.

Recently, the Treasury announced the process of engaging with the Republic of Belarus to strike a Double Taxation Agreement (DTA) to forge stronger ties between the two countries.

DTAs are international agreements to allocate taxing rights between the said parties to avoid double taxation at the international level.

Kenyans.co.ke gives a breakdown of double taxation and nations that Kenya has either concluded or is in the process of eliminating double taxation.

Nations Whose DTAs are In Force With Kenya

Canada, Denmark, France, Germany, Iran, Korea, Norway, Qatar, Seychelles, South Africa, Sweden, United Arab Emirates (UAE), United Kingdom and Zambia.

What This Means

This means that Kenyans working in these nations can conduct business without worrying about being taxed twice.

Nations Who Have Concluded Agreements But Not Signed

Botswana, Nigeria, Portugal, Saudi Arabia, Singapore, Thailand, Turkey

What This Means

Kenyans living in these nations still face double taxation until Kenya and the host country formally sign the agreement.

Signed (Not in Force)

China, East African Community, Italy, Kuwait, Mauritius, Netherlands

What This Means

Kenyans living in these areas still face double taxation as the host nation has yet to enforce the agreement.

Under Consideration

Algeria, Cameroon, Democratic Republic of Congo (DRC), Ethiopia, Ghana, Ivory Coast, Jordan, Macedonia, Malawi, MozambiqueRussia, Senegal, South Sudan, Sudan, Zimbabwe.

What This Means

Kenya and these countries are currently engaging in talks regarding the DTA though nothing has been formalised. 

Advantages of Eliminating Double Taxation for Businesses

This presents an opportunity for businesses to reinvest more of their profits leading to expansion, innovation, and job creation.

Eliminating double taxation reduces the tax burden on business owners thus lowering their expenses.

Countries that enforce DTA become attractive destinations for foreign investors, leading to foreign direct investment and thus stimulating economic growth.

Double taxation presents a complex system for businesses operating in multiple jurisdictions hence removing the principle simplifies tax compliance.

DTAs also create a favourable environment for businesses to be internationally competitive. 

President William Ruto (second left) with Trade CS Rebecca Miano (left) and other regional leaders in Bujumbura.

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The Brief