The Institute of Certified Public Accountants of Kenya (ICPAK) has raised concern that the country’s protracted fuel crisis is affecting productivity in vital industries.
ICPAK Chairman George Mokua urged the government to engage players in the petroleum sector as soon as possible in order to address the shortfall and avoid negative multiplier effects in other areas of the economy.
“I would like to urge the government to swiftly address the current fuel shortage and put measures to avert fuel shortages in future,” he said.
Mokua told the press at the Hilton Hotel today that the overall year inflation rate, as assessed by the Consumer Price Index, had climbed to 5.56 per cent in March 2022, compared to 5.1 per cent in February 2022, according to statistics from the Kenya National Bureau of Statistics (KNBS).
With such a surge in inflation, the Institute’s head noted that the government should continue to implement measures that help citizens, such as a lower VAT rate on basic and essential commodities.
While Mokua recognises the government’s need to raise domestic revenue, he believes that the proposal to amend the Tax Appeals Tribunal Act, 2013, to require a deposit of 50 per cent of disputed tax revenue in a special account at the Central Bank of Kenya before a taxpayer can appeal a Tribunal decision needs more discussion and stakeholder engagement.
“There is a real concern by taxpayers of the risk of abuse of this provision by the KRA and the proposal is bound to have far-reaching consequences as affected taxpayers may not have the cash flows to allow for such deposits.
KRA may also raise very high assessments with a view to collecting the 50 percent where the Tribunal rules in KRA’s favour,” Mokua remarked.
The chairman praised the government for taking tough measures to address the problem of pending bills and urged both levels of government to stick to the specified deadline of June 30, 2022 to resolve all outstanding debts.
“The Institute implores upon Parliament to enact the Prompt Payment Bill, 2021 to curb future delays and ensure businesses not only survive but thrive and make their rightful contribution to the exchequer,” he said.
ICPAK Chief Executive Officer Edwin Makori noted in his speech that, despite higher fuel costs due to global supply chain issues, the government should engage relevant stakeholders and avoid negative multiplier effects.
At the same time, ICPAK vice-chairman Philip Kakai emphasised the significance of a good tax policy that provides an investment-friendly tax system while also producing revenues to support critical pillars of a business-friendly environment, such as security and infrastructure.
Kakai further stated that the institution will continue to applaud and encourage the government for its efforts to boost and defend the local economy and protect livelihoods.
