UNMATCHED POTENTIAL

Kenya can mobilise domestic resources for self-sustenance

Despite suppressed economic progress, the tax revenue collected by the KRA has maintained an upward trajectory

In Summary

• The government should continue putting in place strategic measures to fully open the economy and enhance domestic resource mobilisation.

• Citizens on the other hand should be truthful to their country by paying the rightful share of tax.

The KRA headquarters at the Times Towers
The KRA headquarters at the Times Towers
Image: FILE

Kenya’s economy is among the world economies that Covid-19 has extensively suppressed over the last year.

Thousands have had to contend with substantial pay cuts as their employers reduced spending in line with the tough times.

In a report released last year, the Kenya National Bureau of Statistics noted that almost 4.64 million people had lost their jobs by June 2020 up from 2.94 million in March when the first case of Covid-19 was reported in the country.

As it stands, the situation could be worse.

Despite the suppressed economic progress, the tax revenue collected by the Kenya Revenue Authority has maintained an upward trajectory, especially in the last four to five months.

In December last year, for instance, KRA surpassed its revenue collection target for the month by Sh2 billion after posting a collection of Sh166 billion.

In January, the taxman collected Sh142 billion against a target of Sh138 billion.

The taxman further posted an impressive performance last April where a collection of Sh176.6 billion was registered against a target of Sh170.2 billion.

While it is still a bit early to establish if the annual revenue targets will be met cumulatively, the trend so far heralds a very resilient economy with unmatched potential.

With no definite end to the prevailing pandemic, experts are still optimistic that the economic outlook will continue to take an upward trajectory.

According to a 2021 publication by the African Development Bank, the economy is projected to grow by five per cent in 2021 and 5.9 per cent in 2022.

This is based on the assumption that economic activities will normalise on the full reopening of the economy.

Looking at the above statistics, it is clear our country has great potential to mobilise enough domestic resources for self-sustenance.

If KRA is already surpassing its revenue collection targets with the partially open economy, how much more would the government collect with a fully open economy?

The government should continue putting in place strategic measures to fully open the economy and enhance domestic resource mobilisation.

Citizens on the other hand should be truthful to their country by paying the rightful share of tax.

That way, it will only be a matter of time before we emancipate ourselves from the webs of foreign debts which continue to strangle our country, thus lower the already high ceiling debt.

 Faustin Mwinzi is a lecturer at KCA University