Ruto proposes tax hike amid criticism
Politics
By
Denis Omondi
| May 15, 2024
President William Ruto has outlined plans to incrementally increase Kenya's tax rate, aiming for a rise from the current 14 percent to 22 percent by the end of his presidency.
The initial step, according to Ruto, involves elevating the tax rate to sixteen (16) percent in the upcoming financial year.
“My drive is to push Kenya to a possible 16 percent this year, from 14 percent. I want in my term, God willing, to leave it at between 20 and 22 percent,” said Ruto.
During a meeting with visiting Harvard Business School students at State House, Nairobi, Ruto addressed concerns regarding heightened taxation and escalating government expenditure.
READ MORE
Mbadi blames revenue shortfall on KRA's outdated tax systems
William Ruto hit by perfect economic storm
Cooperative Bank seeks to strengthen ties with NGOs
Mbadi blames revenue shortfalls on KRA's outdated tax systems
Absa Bank Kenya appoints Marion Gathoga-Mwangi as non-executive director
How performance contracting improves management in public institutions
KRA warns low tax morale, job cuts to affect revenue collection
Signal Alliance Technology Holding gets ISO certifications
How SHIF, other recent deductions have eaten into your earnings
Rejecting claims of over-taxation, the president referenced empirical data indicating that Kenya's tax-to-revenue ratio stood at 14 percent last year, lower than the 22 to 25 percent average among African counterparts.
“Kenyans have been socialised to believe that they pay the highest taxes. Empirical data shows that Kenya, as of last year, had a fourteen percent tax as a percentage of revenue. Our peers on the continent average between twenty-two and twenty-five percent,” he said.
He clarified that he wasn't drawing comparisons with OECD nations like France, which maintains a 45 per cent tax rate.
Ruto stressed the necessity for fiscal discipline, advocating for living within the country's means despite potential backlash.
He pointed to positive economic outcomes such as currency stabilization and debt alleviation resulting from unpopular yet strategic decisions. "Those currently dissenting will eventually applaud," said Ruto.
The President's remarks coincide with ongoing discussions surrounding the Finance Bill, 2024, which proposes additional taxes on various goods and services, including bread, mobile money transfers, alcoholic beverages, and motor vehicles.
The legislation, already under parliamentary review, aims to bolster state revenue towards the targeted Sh2.9 trillion mark, despite anticipated resistance from taxpayers.
- Why Raila must bridge Africa's linguistic divide to win AUC chair
- Thicky Sandra reveals she showers three times a day for glowing skin