The lack of a national tax policy has resulted in heavy taxation of Kenyans by the government, members of civil societies have said.
The Okoa Uchumi civil society in partnership with several lobbyists have joined forces to condemn the excessive taxation imposed on citizens by the Kenya Kwanza government.
In a statement released on Tuesday, the lobby cited that the regime's ability to impose excess taxes has been facilitated by Kenya's absence of a comprehensive national tax policy.
They noted that enactment of the policy would provide a systematic framework for developing and implementing tax-related laws, regulations, and guidelines.
“Currently, our tax system lacks predictability which poses difficulties for both individuals and businesses, as it heavily relies on financial legislation introduced annually,” the statement reads.
“To effectively tax sectors that are traditionally challenging to regulate, such as agriculture, the informal economy, and online businesses, there must be a well-defined framework to steer the taxation process.”
The groups want the government to broaden the tax base instead of burdening Kenyans with punitive taxes.
They noted that the move can be done by focusing on untapped revenue sources that have a less detrimental impact on economic growth.
“One unexplored source in Kenya is the property taxes, which can be feasibly enforced. For instance, by updating the property valuation roll in Nairobi City County, it is anticipated that property tax collections will more than double the current rate of 36 per cent,” the statement reads.
In addition, they called on the state to address tax evasion by high-net-worth people adding that it will also reduce the tax base.
“This can be achieved by enacting appropriate legislation regarding cross-border transactions and financial transparency,” the statement reads.
They added that tackling specific challenges in tax administration, and enhancing efficiency and effectiveness necessitates digitization.
“Kenya can take a cue from Rwanda's experience, where an electronic billing system has nearly doubled Value Addition Tax (VAT) collections. Rwanda's electronic billing system provides real-time data and increasingly covers the informal sector, making tax collection more efficient,” the statement reads.
The government has also been urged to urgently combat corruption and misuse of public funds.
The groups say resources should be allocated to sectors that promise high returns, promote sustainable development and enhance the welfare of citizens.
