Monday, May 15, 2023 – When Azimio Leader Raila Odinga called President William Ruto Zakayo over his obsession with taxes, many people made fun of him until now.
This is after Ruto moved to tighten the noose on hustlers who have previously not been paying tax through new measures targeting Kenyans in the informal and agriculture sectors.
According to the Budget Policy Statement for 2023, Ruto, through Treasury CS Njuguna Ndung’u, indicated that there is a potential to net Sh2.8 trillion in revenue from the unexplored Micro, Small, and Medium Enterprises (MSMEs) sector tax base.
In the policy guidelines on hard-to-tax sectors, Treasury proposed to go hard on agriculture and informal sectors to increase tax yields.
“To achieve this objective, the government will explore ways of enhancing taxation of informal sectors including through increasing presence in big towns and cities and explore the mechanism for collecting taxes from the informal sector such as the appointment of tax collection agents,” the Policy states.
It also proposes rolling out education programmes to farmers and informal sector groups on taxation and to “require farmers and informal sector players to register with respective sub-sector associations and co-operative societies.”
This is besides a strong drive to ensure that counties and the national governments share information that will help bring more potential taxpayers on board, as the government strives to grow collections.
Tax, levies, and fees collection could also be done at a central point soon as opposed to the current scenario where county and national governments run a different set of collection channels.
This plan would bring changes in many areas where counties are currently collecting taxes, fees, and levies, including parking fees, and business licenses such as single business permits and cess.
The Policy comes following KRA’s failure to collect enough taxes, with 2021/2022 being the first year the government body surpassed its targets to collect over Sh2 trillion.
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