International Monetary Fund credits Kenya’s tax reforms for revenue growth

The International Monetary Fund (IMF) has hailed Kenya Revenue Authority’s i-Tax system and the Excise Goods Management System (EGMS) for increasing revenue collection.

In the first review of Kenya’s performance, completed on January 25, the global lender says the systems have brought about efficiency, transparency and accountability.

This is despite the macro-economic challenges experienced by the country such as interest rate controls that have affected the banking sector’s profitability.

IMF says in the report fiscal developments in the first quarter of the 2016/17 financial year were characterised by a marked improvement in revenue collection.

The report says receipts of domestic VAT and excise revenues were particularly high, reflecting improvements in revenue administration from i-Tax and EGMS as well as the re-introduction of VAT withholding tax.

Key reforms in the Domestic Taxes Unit that spurred revenue collection, IMF says, included the twinning of the Capital Gains Tax (CGT) payment with payment of Stamp Duty on i-TAX to expand tax collection.