William Ruto seeks to widen tax base to Sh4trn

President William Ruto with Narendra Raval (Chairman Devki Group of Companies) during official commissioning of Devki Steel Mills, Kwale County. [Omondi Onyango, Standard]

President William Ruto is pushing for the expansion of the tax base which he says will be an antidote to the country's debt crisis.

Speaking during service at Faith Evangelistic Ministry in Karen, Nairobi, yesterday, Ruto urged faithful to support Kenya Kwanza government's plans to raise revenue.

The President said despite tax collection registering an improvement over the years, the country still has the potential to get more than Sh2.03 trillion the Kenya Revenue Authority collected in the financial year ending June 2022

He said countries in the same income category as Kenya raise between 20-25 per cent of their GDP from taxes.

"We must move our revenue collection from 14 per cent to 25 per cent. From Sh2.1 trillion to between Sh4 trillion and Sh5 trillion," said the president. The push for a broader tax base has been Ruto's rallying call ever since he took over power, at a time the country is facing acute drought, high cost of living, poor economy and high inflation.

Barely a month after being sworn in as president on September 13, he gave the KRA a revenue collection target of Sh3 trillion by the end of the next financial year and to double it over the next five years.

Ruto directed KRA to seal revenue collection loopholes and evaluate ways to expand the tax base while approaching the taxpayer in a non-confrontational but firm manner to increase tax collection. On Thursday, Ruto appointed United Democratic Alliance (UDA) National Election Board Chair Anthony Mwaura as KRA board chairman for a period of three years, taking over from Amb Francis Muthaura.

Mwaura, 52, who is a civil engineer, has been tasked to achieve Sh3.5 trillion revenue collection in the first year in office.

"We are raising only Sh2.1 trillion in revenue which is 14 per cent of GDP. We need to raise 25 per cent of our GDP like other middle income countries. That is between Sh4 trillion and Sh5 trillion," said President Ruto.

Mwaura promised to achieve this by sealing revenue collection loopholes and bringing board those who have not been taxes.

"People who are supposed to pay taxes are not paying, we know most of the games being played by the players. We will broaden tax base, there are people in the private sector who are making more money but are not paying to pay," he said. "We will see how we will achieve Sh3.5 trillion and in the next two years Sh5 trillion," he added.

Ruto said the government is focused on financing development projects using taxes owing to the fact that on an annual basis more than Sh1 trillion goes to servicing the public debt that stood at Sh8.6 trillion as of May 2022.