Taxpayers rattled by Treasury's threats on payment delays
3 weeks ago, 09:26
Cash-strapped and desperate, President Uhuru Kenyatta’s Government is now lunging at everyone in its path and emptying their pockets in a frantic bid to finance the country’s expansive budget.
Last week, Cabinet Secretary Henry Rotich read a budget statement which painted a picture of a cash-hungry Treasury willing to mobilise revenue by every means, even hitting hard innocent taxpayers who might have a genuine explanation for delaying to file tax returns.
A poor man who toils from dawn to dusk for a peanut salary - just enough to send some upkeep cash for his family in the countryside via M-Pesa and be left with a little to light his shack with a tin lamp - has not been spared Mr Rotich’s wrath.
In a classic case of raiding the pockets of persons who are in dire strait, the Government has ruthlessly increased taxes on mobile money transfer fees and kerosene, two items that are essential for poor households who are already smarting from high cost of living.
Rotich also wants to raid mama mboga, jua-kali artisans and kiosks through a presumptive tax of 15 per cent that will be factored into their business permits.
This new measure will see Treasury rope in 1.56 million licensed micro, small and medium establishments (MSMEs) and 5.85 million unlicensed businesses in the country, according to findings in a survey by Kenya National Bureau of Statistics.
Unfortunately, these are businesses that are already struggling to survive and any new tax measures could see the already alarming rate at which they collapse, currently at 46 per cent in the first year, go up.
This could pose a serious threat to economic recovery, which Rotich badly needs to boost his dwindling revenues.
With a mountainous budget of Sh3 trillion and fast running out of options to tax, Treasury has resorted to punitive measures to ensure compliance, reading the riot act to Kenyans who have a penchant for lateness in filing returns.
In his budget speech, Rotich said promoting tax compliance among taxpayers is key to boosting revenue mobilisation efforts to avail the much-needed funds for supporting the ‘Big Four’ plan.
So desperate for quick cash is Treasury that it gave an additional Sh4.3 billion to the Kenya Revenue Authority, with the latter promising to squeeze from taxpayers an extra Sh74 billion between January and June, 2018.
In March, Rotich warned KRA against missing income tax collection targets, noting that Treasury had given the tax authority everything they needed. He promised to personally visit tax collection centres.
“We have given them the mandate to collect revenues and they have to deliver,” the CS said at a press briefing, adding that the Government had played its part by adding KRA more personnel and procuring scanners to nab excise duty cheats, along with rollout of Integrated Customs Management System (ICMS) to seal leakages.
“I’ll personally be visiting collection points to ensure whoever is not working to deliver our targets will face the wrath of Treasury,” he said.
Clearly the Government is trying ...
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