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Businesses and individuals working within the timber industry will now face significantly higher costs to acquire movement permits due to new regulations by the Kenya Forest Service (KFS). The cost of a single transport permit has soared to Ksh25,570 from the previous Ksh2,000.
In a notice dated July 10, 2024, KFS announced that the new charges would take effect from July 13, 2024. The breakdown of the new fees includes a consignment fee of Ksh20,000, with an added 16 percent Value Added Tax (VAT) amounting to Ksh3,200. The movement permit fee will remain at Ksh2,000, but will now also attract a VAT of Ksh320. Additionally, transporters are required to pay a service transaction fee of Ksh50 on the E-Citizen platform.
All transactions related to these permits will be processed exclusively through the E-Citizen platform. The new regulations also introduce a fee of Ksh30 per bag of charcoal transported, plus a 16 percent VAT. Transporters of charcoal bags will similarly be required to pay the Ksh50 E-Citizen fee for each transaction. Non-wood forest items will incur a fee of Ksh2 plus VAT, along with the E-Citizen transaction fees.
The KFS has also introduced new guidelines prohibiting the grazing of animals in specific areas and implementing zoning. Forest zonation and mapping will identify designated forest areas suitable for grazing as prescribed in the Participatory Management Plans concerning the forest station (PFMP).
Players in the construction industry have immediately responded, questioning the rationale behind the substantial increases. Dr. Hezekiah Kariuki Mwangi of Comfort Homes and Together as One termed the move as needing a proper approach, warning that it could lead to a significant rise in house prices.
Dr. Kariuki, recently voted Best Microfinance Lender and Most Customer-Friendly, with Comfort Homes recognized as the most affordable and dynamic real estate dealer, emphasized that the current cost of construction materials is already very high. “If these costs continue to increase, the end consumer will suffer,” he noted.
The KFS’s decision has sparked a debate among industry stakeholders about the potential impact on the timber and construction industries and the broader implications for the economy.
