Ruto Administration Targets Trillions in Untapped Revenue with Tax Agents in Streets and Markets

by | May 13, 2023 | Business, News | 0 comments

The Treasury is set to crack down on tax evaders in the informal and agricultural sectors, as President Ruto’s administration seeks to collect Sh2.8 trillion in untapped revenue from Micro, Small, and Medium Enterprises (MSMEs). The ambitious plan, detailed in the 2023 Budget Policy Statement (BPS), aims to expand Kenya’s tax base and streamline the country’s taxation framework over the next three years.

The recently unveiled National Tax Policy (NTP) focuses on unifying tax, levy, and fee collection, as well as promoting information sharing between national and county governments. These efforts will help identify previously untaxed individuals and close existing gaps in the tax collection process.

To increase tax yields, the Treasury is determined to target hard-to-tax sectors, such as agriculture and informal markets. Strategies include enhancing taxation of informal sectors in major urban areas, appointing tax collection agents, and implementing educational programs for farmers and informal sector groups. Additionally, the policy requires these players to register with relevant sub-sector associations and cooperative societies.

In an effort to centralize tax collection, the plan proposes a single collection point for taxes, levies, and fees, replacing the current system where county and national governments maintain separate channels. This change will impact areas where counties currently collect taxes, such as parking fees and business licenses, and will also address underperformance in counties’ Own Source Revenue (OSR) collection.

A report from the Commission on Revenue Allocation (CRA) revealed that Kenya’s 47 county governments have the potential to collect Sh216 billion annually, yet they only manage to gather Sh31 billion—a staggering 80% underperformance. CRA Chairperson Jane Kiringai asserted that many indebted counties have the capacity to allocate at least 30% of revenues toward development.

In response to local business community demands, the government is also considering the establishment of a specialized court to handle tax disputes, further solidifying President Ruto’s commitment to strengthening Kenya’s tax collection infrastructure.

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