Taxes –Majority Leader in the National Assembly Kimani Ichung’wah has asked President Willima Ruto to reduce Value Added Tax VAT from 16 to 15 percent.
In his latest remarks on KTN, the National Assembly Majority Leader claims that a reduction in the VAT will help increase compliance and economic growth.
The United Democratic Alliance UDA Party elected Member of Parliament argued that, from his accounting profession, he has the view that slashing down the current VAT rate by one percent would be helpful and could have a quicker positive impact to the economy.
This together with the elimination of tax exemptions and zero-rated products could make revenue collection much easier with a hundred percent compliance.
In his address on the television on Wednesday May 16 morning, Ichung’wah noted that strategic fiscal measure would help reduce tax burden to the local Kenyan arguing that the current situation only favours the affluent in the society and leaves the poor taxed even more.
“If you were to ask me if we were to reduce even the standard VAT rate from 16 per cent to about 15 per cent, then do away with all the tax exemptions on VAT and zero-rated items. We would collect more money.”
The proposed adjustments come in the wake of the Finance Bill 2024, which aims to introduce VAT, raise excise taxes on various items, including M-Pesa transactions, airtime, and bank transfers. The government seeks to generate an additional Ksh323 billion in taxes for the upcoming financial year.
President William Ruto has, in his latest resolve and announcement, promised to increase local tax collection from 16 percent to 22 percent.
In another interview on Citizen Tv hosted by Jeff Koinange on Tuesday night, United States of America USA Ambassador to Kenya, Meg Whitman, advocated for expanding the tax base through job creation rather than raising tax rates.
