Meg Whitman: Taxation rates should be increased gradually

US Ambassador to Kenya Meg Whitman during an interview on Spice FM on May 15, 2024. [Collins Oduor, Standard]

United States Ambassador to Kenya Meg Whitman has demonstrated her objection to President William Ruto’s plan of increasing tax rates from 14 per cent to 22 per cent to GDP ratio.

Whitman said that the issue of tax is a worldwide issue and for a country to be economically stable, it requires more time as the process is gradual.

“Taxes are an issue in every country and what we hear in American companies is that Kenya just needs to be the lowest taxed but consistent; keeping the tax the same for three, four, or five years because businesses make investments with a return horizon,” she said.

She made the comments during an interview on Citizen TV where she emphasized the importance of taxation for better economic growth and well-being in the country.

She added that the government’s expectation to make money in one year is not possible.

Instead, she said this will be achieved gradually with the employment of tax consistency throughout the years.

Whitman highlighted that the best way for the government to achieve their goal of expanding of tax base is by creating more job opportunities for the citizens.

“There’s two ways; to increase taxes and also expand the tax bases which is the number of people who are being taxed and that’s why jobs, jobs are so important. Good paying jobs, with a steady pay and some benefits,” said Whitman.

The ambassador stressed that it is easier for a country to be economically stable when more of its citizens have a steady income and they will not encounter any difficulty in paying taxes.

“When more people have a steady income they can pay taxes; so you expand the number of taxpayers and not just go for the same people,” said Whitman.

President Ruto on Thursday defended the government’s plan to levy additional taxes on Kenyans saying that it will help the country to reduce reliance on borrowing from other countries

The President highlighted that he has a plan to increase the country’s average tax from the current 14 per cent to 16 per cent to GDP ratio.

He said that he projects to achieve an average rate tax of between 20 and 22 per cent by the end of his term in office.