A well-functioning regulatory and business licensing framework promises to enhance the quality of regulatory governance in Nyeri County and will serve to promote business growth, entrepreneurship, jobs and wealth creation. Strengthening the quality of the business environment in Nyeri County will provide a stable and predictable environment for businesses to set up and operate. A better business environment will reduce transaction costs and improving business competitiveness in the County and nationally, thereby enhancing the County’s image as a good location to invest and do business.
The Single Business Permit (SBP) is a significant revenue raising tool for Nyeri County and contributes about 19.5% of total revenues1. SBP also serves to regulate business enterprises operating in the County. All registered businesses, operating from permanent premises, including small and micro enterprises, must comply with SBP requirements including: payment of assessed SBP permit fees, operating from habitable and approved building structures2, ensuring public health and safety and operating in such a way that protects and safeguards the environment. A review of the SBP administration and management infrastructure in Nyeri County shows that before the devolved system of Governemnt was introduced in Kenya in 2013, significant variations existed between SBP administration in urban and rural areas with a lower fee band applying to the later.
These variations in SBP practices across Nyeri County still persist. The County aims to review the pre devolution SBP structures with a view to streamline SBP administration. The SBP process in Nyeri County is encumbered by several constraints including: ï‚· Very limited automation and significant reliance on paper based systems. Lack of a comprehensive, up-to-date and automated Businesses Register leading to reactive issuance of SBPs3 and also leading to inability by Nyeri County to set realistic SBP revenue targets and performance benchmarks.
Nyeri County has embarked on a business survey and expects to put in place a comprehensive Register of Businesses in the near term. Inability to implement ex-post risk based, targeted and cost effective inspection of businesses to ensure compliance with all SBP requirements. Significant discretion with regard to SBP fee assessment, including assignment of activity codes, a situation that may engender rent seeking behavior. Delays and congestion at the Nyeri Sub-county SBP offices occasioned by, among others, the need for several visits to the bank during the SBP issuance and renewal process and the fact that the one SBP Nyeri Sub-county office that currently exists also handles other taxes and fee payments. Significant SBP avoidance by new businesses, during the October – December period, leading to loss of revenue for Nyeri County. There is little incentive for a business established say in Q4 of the calendar year to acquire an annual SBP which would then expire on December 31st of the same year.
A commitment to simplify, streamline and automate SBP administration and management will enable Nyeri County minimize SBP compliance costs incurred by businesses. The improved system would then be replicated or extended to all Sub-counties in Nyeri. In addition to this, Nyeri County is likely to reduce the costs it incurs in administering SBP, especially the costs associated with unplanned business inspections4. An efficient