The future of businesses most of which are recovering from the adverse effects of the Covid-19 pandemic face tough times ahead following directive by President William Ruto to taxman, the Kenya Revenue Authority (KRA) to do away with tax waivers.
KRA has Sh3trillion collection target amid rising national government debt distress concerns coupled by rising inflation and runaway cost of living.
The president’s directive is expected to have direct impact on choice of Kenya on ease of doing business.
President Ruto has urged against requests for tax waivers saying the government had “stopped” issuing waivers due to pressing development needs.
Ruto who is seeking to expand annual revenue collections to Sh5trillion by 2027 as part of efforts to tame debt said “other alternatives” should be considered before waiver requests.
“This waiver matter is a difficult one. With all these development initiatives it will be difficult to finance our programs if we take that route.” The president said.
He was responding to an appeal during an interdenominational church service yesterday.
Kenya’s annual revenue collections currently stand at Sh2trillion with the country having crossed the Sh2trillion mark in July 2020 KRA reported a Sh2,031 trillion collections for Financial Year 2021/2022.
KRA had posted Sh1.7trillion in the preceding year.
The agency which Ruto is proposing to rename the Kenya Revenue Service (KRS) its initial target of Sh1.88 trillion revised twice to Sh1.91 trillion and Sh1.98 trillion.
Despite it being considered a monumental achievement being the first time KRA was exceeding its target in fourteen years, Ruto has consistently maintained Kenya’s revenue collections are not commensurate with its economy.
The Energy and Petroleum Regulatory Authority (EPRA) has since dropped subsidy on petrol and moved to cushion diesel consumers, predominantly used in industries, with a cross-subsidy supported by super petrol users.