•COTU says the SME sector is already struggling and the 3% sales tax will stifle growth
•Atwoli wants the tax shelved and alternative means of generating revenue explored
The Central Organisation of Trade Unions wants the government to drop plans to impose a 3 per cent turnover tax on SMEs whose sales fall below Sh5 million.
Secretary general Francis Atwoli said on Monday that the move will worsen the the situation in the SME sector that is struggling in a tough economy further stifling growth.
The sales tax is being effected after being repealed in 2019 and replaced with a presumptive tax.
Atwoli said the tax will adversely affect micro, small and medium size enterprises "halt the steady development that has been on a rise and contributed largely to economic development in our country."
"The 3% Turn over Tax will not only destroy the fastest growing sector of our economy but will render jobless the many Kenyans who are employed in the small and medium enterprises," he said.
Implementing the tax would be a retrogressive adventure at a time when job creation has been sold as a leading priority of the government, Atwwoli added.
He said the new tax regime will have net adverse effects than the intended good, and instead treasury CS Ukur Yattan should consider alternative means of raising the monies that do not unnecessarily worsen the economic pressure Kenyans are currently experiencing.
Atwoli said cutting on wastage, dealing with corruption and prioritising key deliverable would free up resources for use.
Kenya National Bureau of Statistics 2016 data showed that Micro, Small and Medium Size enterprises employed over 15 million Kenyans. In addition, a 2017 KNBS report showed that 0ver 1.6 million MSMEs are licensed with a majority of them operating in the informal sector.