@DailyNation

KRA should change tack on tax collection

4 months ago, 16 Maý 21:16

By: Editorial

The challenge facing the National Treasury is the inability to raise enough taxes to service the annual budget. For years, the Kenya Revenue Authority has failed to meet tax collection targets. Last year, the KRA missed the target by some Sh60 billion. Factors like a sluggish economy, unemployment and, prominently, tax evasion and corruption, are to blame.

Now, the National Treasury is seeking new measures to up tax collections. It has published a new law that makes several proposals to raise revenues. One of the suggestions is to introduce a 35 per cent top tax for high-income earners. The model is to get top earners to contribute more and cushion the low-end earners.

But this presents a different challenge. It is only a small percentage of workers who earn the top dollar — such that targeting those raking in at least Sh750,000 a month may not bring in much.

LOWLY PAID

By and large, the bulk of workers are lowly paid.

Indeed, this model goes to demonstrate a major weakness in the tax system — namely; targeting only a small cadre, mainly wage earners, while leaving out a fairly big population.

Raising tax portfolio through constant increases for just a small group of people may work, but up to a point; thereafter, it becomes untenable and even punitive, hence counter-productive.

This is why we challenge the authorities to seek other ways of raising taxes.

TAX EVASION

Tax evasion is rampant and the authorities pretty well know about it. It is even worse that some tax collectors collude with potentially large taxpayers to avoid paying the right rates. Some policies and regulations are equally restrictive and hamper business; hence, they have a negative impact on incomes and, subsequently, tax revenues.

The National Treasury must work on economic recovery and growth to inspire trade, jobs and wealth creation. This will, in turn, generate new and incremental incomes and boost tax collections.

KRA must expand the tax base and curb evasion. Reforming taxation laws is vital, but it should be done in a way that expands the tax base rather punishing a few.


Read More


Category: oped opinion news

Suggested

12 hours ago, 23:50
@TheStar - By: Okech Kendo
OKECH KENDO: Will fed-up masses please rise up

Most Kenyans are hungry, but we the people are not angry enough to tell Caesar some overdue home truths. Taxpayers are offended, but we are not angry enough to say the donkey is tired.There is rhetori ...

Category: oped opinion news
16 hours ago, 20:16
@DailyNation -
THE CUTTING EDGE

Lowering the minimum entry grades to teacher training colleges amounts to engaging educational reverse gear. ...

Category: oped opinion news
1 day ago, 10:37
@TheEastAfrican - By: Charles Onyango-o ...
No Rolls for Museveni, he’s happy with a Probox

An infrastructure pool buying road equipment would have the muscle to get it cheaply. ...

Category: topnews news oped opinion
1 day ago, 07:42
@TheEastAfrican - By: Martin Rupiya
Madagascar caught in France’s web of political control

The chain of events that led to this state of affairs started almost 10 years ago. ...

Category: topnews news oped opinion
1 day ago, 00:56
@DailyNation - By: Editorial
Resolve Migingo dispute

The failure to resolve dispute over the one-acre piece of rock is an indictment of the leadership. ...

Category: topnews news oped opinion
1 day ago, 00:57
@DailyNation - By: Editorial
MPs must tackle fuel VAT debate soberly

Taxation and more taxation is not the panacea for budget gaps. ...

Category: oped opinion news

@DailyNation

KRA should change tack on tax collection

4 months ago, 16 Maý 21:16

By: Editorial

The challenge facing the National Treasury is the inability to raise enough taxes to service the annual budget. For years, the Kenya Revenue Authority has failed to meet tax collection targets. Last year, the KRA missed the target by some Sh60 billion. Factors like a sluggish economy, unemployment and, prominently, tax evasion and corruption, are to blame.

Now, the National Treasury is seeking new measures to up tax collections. It has published a new law that makes several proposals to raise revenues. One of the suggestions is to introduce a 35 per cent top tax for high-income earners. The model is to get top earners to contribute more and cushion the low-end earners.

But this presents a different challenge. It is only a small percentage of workers who earn the top dollar — such that targeting those raking in at least Sh750,000 a month may not bring in much.

LOWLY PAID

By and large, the bulk of workers are lowly paid.

Indeed, this model goes to demonstrate a major weakness in the tax system — namely; targeting only a small cadre, mainly wage earners, while leaving out a fairly big population.

Raising tax portfolio through constant increases for just a small group of people may work, but up to a point; thereafter, it becomes untenable and even punitive, hence counter-productive.

This is why we challenge the authorities to seek other ways of raising taxes.

TAX EVASION

Tax evasion is rampant and the authorities pretty well know about it. It is even worse that some tax collectors collude with potentially large taxpayers to avoid paying the right rates. Some policies and regulations are equally restrictive and hamper business; hence, they have a negative impact on incomes and, subsequently, tax revenues.

The National Treasury must work on economic recovery and growth to inspire trade, jobs and wealth creation. This will, in turn, generate new and incremental incomes and boost tax collections.

KRA must expand the tax base and curb evasion. Reforming taxation laws is vital, but it should be done in a way that expands the tax base rather punishing a few.


Read More

Category: oped opinion news

Suggested

12 hours ago, 23:50
@TheStar - By: Okech Kendo
OKECH KENDO: Will fed-up masses please rise up

Most Kenyans are hungry, but we the people are not angry enough to tell Caesar some overdue home truths. Taxpayers are offended, but we are not angry enough to say the donkey is tired.There is rhetori ...

Category: oped opinion news
16 hours ago, 20:16
@DailyNation -
THE CUTTING EDGE

Lowering the minimum entry grades to teacher training colleges amounts to engaging educational reverse gear. ...

Category: oped opinion news
1 day ago, 10:37
@TheEastAfrican - By: Charles Onyango-o ...
No Rolls for Museveni, he’s happy with a Probox

An infrastructure pool buying road equipment would have the muscle to get it cheaply. ...

Category: topnews news oped opinion
1 day ago, 07:42
@TheEastAfrican - By: Martin Rupiya
Madagascar caught in France’s web of political control

The chain of events that led to this state of affairs started almost 10 years ago. ...

Category: topnews news oped opinion
1 day ago, 00:56
@DailyNation - By: Editorial
Resolve Migingo dispute

The failure to resolve dispute over the one-acre piece of rock is an indictment of the leadership. ...

Category: topnews news oped opinion
1 day ago, 00:57
@DailyNation - By: Editorial
MPs must tackle fuel VAT debate soberly

Taxation and more taxation is not the panacea for budget gaps. ...

Category: oped opinion news
Our App