•December 16 deadline set for submission of views.
•Tax proposals to be aligned to agriculture, MSMEs, housing, healthcare, digital superhighway, and creative economy.
The Kenya Kwanza administration has invited Kenyans and investors to give their views on the tax proposals for the next financial year.
Treasury Cabinet Secretary Njuguna Ndungu said in a public notice that the proposals would go a long way to helping in the preparation of the Finance Bill, 2023.
President William Ruto campaigned on the promise of reducing the cost of living, which tax measures have a huge bearing on.
In this regard, CS Ndung’u wants government departments and agencies, the private sector, NGOs, and individuals to submit their proposed tax policy measures.
“The proposals should echo with the Economic Recovery Strategy and the country’s economic blueprint Vision 2030,” he said.
Ruto team says the tax proposals should be those that will help the government achieve its objectives in agriculture, MSMEs, housing, healthcare, digital superhighway, and creative economy.
“The proposals may include measures on regulatory reforms, revenue administration reforms, and any other measures that may enhance macroeconomic stability and reposition the economy on an inclusive and sustainable growth trajectory,” the CS said.
Kenyans and concerned business players have until December 16 to submit the proposals, which are required to spell out the specific amendment to the tax law, and justification.
“The submissions should be specific on the proposed amendment to the tax law, supported by a statement on the issue to be addressed and a clear justification for the proposed amendment,” Prof Ndung’u said.
The views are being sought at a time when economists and experts on matters of finance have pointed out the counterproductive effects of high taxation.
The Parliamentary Budget Office, in its analysis of the current budget as aligned to Ruto’s manifesto, said the government needs to relook at its tax policy.
The experts observed that Kenya’s tax revenue collection is still below the target of 25 per cent of the gross domestic product.
“Consequently, it is evident that policy options and investments by the Government aimed at expanding the tax base, enhancing tax compliance and reducing tax expenditures have been unsuccessful,” PBO said.
Among taxes cited for increasing the cost of living includes the tax on fuels, motorcycles, and cooking gas, alongside other ‘sin’ taxes.
Among other taxes introduced in the latter days of the President Uhuru Kenyatta administration included an increase in Capital Gains tax from 5 per cent to 15 per cent, the introduction of a tax on financial earnings by non-residents, exemption of non-residents with permanent business establishments from digital service tax, and allowing tax deductions on donations to charitable organizations.
The Finance Committee of the National Assembly said it would, among its priorities, review the existing taxation regime saying they have increased the cost of doing business.
Chairman Kuria Kimani said the reviews would be incorporated in amendments to tax laws in the short term, and the Finance Bill, 2023 for those to be implemented in the long term.