Construction players protest state's bid to tax mining sector
Business
By
James Murimi
| May 02, 2024
Players in the construction industry have protested the government's move to introduce taxes in the artisanal and small-scale mining (ASM) sector.
This follows the Mining Blue Economy and Maritime Affairs Ministry directive to all artisanal miners to form cooperatives.
Mining Principal Secretary Elijah Mwangi said the government is keen to ensure that it generates revenue from the sector.
"For the last four years, our ministry has not licensed anyone. Now that we have launched these committees to regulate mining at the local level, this will ensure compliance and payment of taxes," said Mwangi.
But players in the construction industry have objected to the move saying it would push up the cost of construction.
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Eric Ndegwa, a building material supplier, said the government should have involved key players in the mining sector before drafting the regulations.
"If such regulations are implemented, all of us in the construction chain will be forced to absorb the risk. These new taxes will hinder the majority of Kenyans from constructing houses. As a building material supplier, I will be forced to sell out my lorries and other equipment because it will be expensive for me. The effect will trickle down to everyone," Ndegwa told The Standard.
He supplies building stones, ballast, and sand in Mt Kenya region.
"What will happen to the local artisanal miner who does not have equipment but still conducts the mining business? Where will that individual get the certificate to operate? If that artisan probably sells to me Sh1,000 for a ton of his or her produce, how will they afford to pay for the taxes?" He posed.
LOATA Sand Dealers Cooperative Society Limited chairman Josephat Ndooko also lamented that the regulation spearheaded by the ministry will greatly affect the pastoralist community.
The cooperative regulates sand harvesting business in the Laikipia North sub-county and serves Makurian, Kurikuri, Murupusi, Ilpolei, and Munishoi community group ranches.
Ndooko said that, from the proceeds of the sand harvesting business, they set aside Sh4.5 million annually towards bursaries for learners in the sub-county.
"We have been using proceeds from the sand harvesting business to implement various projects in the community ranches. Now that the government has started introducing mining licenses to our activities, we feel that the community will suffer," the chairman said.
The PS said they will conduct a crackdown using the Mining Police Unit that has been formed.
"As a government, we want to regulate this industry, just like what is happening to the boda boda industry. The lead person will be the governor, whose nominee is the chairman, and will ensure fairness,'' Mwangi said.