KEPSA calls for predictable taxation to spur private sector growth
Frequent revision of various taxes and introduction of new ones have been blamed for making the business environment difficult
The Kenya Private Sector Alliance (KEPSA) has highlighted the importance of stability and predictable tax regimes to their growth.
Speaking during an engagement with the National Assembly Finance and National Planning Committee, KEPSA CEO Carole Kariuki said fiscal and taxation policies should serve as enablers of business growth, investment attraction, and economic transformation.
“While we recognise the government’s need to raise revenue and manage debt prudently, it is crucial that the private sector remains competitive, productive, and resilient in the face of fiscal adjustments. No country taxes itself into prosperity,” she emphasised.
Frequent revision of various taxes and introduction of new ones have been blamed for making the business environment difficult for private companies forcing some to restructure to remain afloat or shift operations to other countries. Others have applied for deregistration.
On his part KEPSA chairman Dr Jas Bedi called on stakeholders to focus on driving Kenya’s competitive advantage, highlighting five essential drivers of competitiveness: streamlined trade policies, cost-effective utilities, lower logistics costs, skilled labor productivity, and affordable financing.
“If we address issues that drive competitiveness, we will be doing justice to Kenya’s economy,” said Dr Bedi, noting that these would spur jobs and inclusive wealth creation for Kenyans, enhance governance and economic stability, encourage cutting-edge innovation and investment in competitive human capital, bridge social inequalities, and create a globally competitive business environment.
The consultative forum between KEPSA, through its Public Finance Sector Board, and the committee was held to kick-start discussions on the Finance Bill 2025.
It is the first of a series of proactive engagements spearheaded by KEPSA to inform the development of a more pro-Kenyans and business-friendly Bill, aligning with both government and private sector priorities.
Some of the regulatory and administrative reform issues presented to the committee included the inflation adjustment formula, Tax Laws (Amendment) Act, 2024, withholding tax, credit adjustment vouchers, Timelines for Objection Review and Alternative Dispute Resolution (ADR), misalignment of the Value Added Tax (VAT) and the Turnover Tax (TOT) regime.
Committee chairman Kuria Kimani emphasised the mutual benefits of engagement between the committee and the private sector. He stated that these interactions not only assist the private sector but also provide the committee with valuable insights into pain points, enabling proactive engagement before the Finance Bill 2025 discussions begin.
Furthermore, Kimani, who is also the Molo MP, highlighted the importance of striking a balance between promoting local manufacturing and maintaining healthy trade, recognising that both are critical drivers of job creation and overall economic growth.
Both the Committee and KEPSA asserted their commitment to a more inclusive dialogue approach, bringing on board other National Assembly departmental committees that directly have a role in shaping Kenya’s business environment.
