The Controller of Budget (COB) has asked the government to stop increasing taxes on employed Kenyans and instead focus on getting more untaxed people into the bracket.
In a report on budget implementation by the national government between July and September 2023, COB Margaret Nyakang’o notes that increasing taxes on employed Kenyans has reduced their purchasing power and cites it among reasons the Kenya Revenue Authority is struggling to meet the collection targets.
“The shortfall in revenue collection results in delays in financing government programmes, affecting the delivery of services to the citizens based on promises by the government of the day. The Controller of Budget recommends that the government, through the KRA, enhances revenue mobilising strategies,” Dr Nyakang’o said in the report.
“These include creating more employment opportunities for the unemployed Kenyans and bringing more people into the tax bracket, unlike increasing taxes for the employed Kenyans, which erodes the purchasing power, resulting in counter-productivity.”
Receipts into the Consolidated Fund during the July-September 2023 quarter fell short of target, to realise 18 percent of the annual target of Sh4.13 trillion, as compared to a performance of 19.2 percent of annual target between July and September last year.
“In the period under review, receipts into the Consolidated Fund were Sh745.36 billion, representing 18 percent of the annual target compared to 19.2 per cent recorded in a similar period FY 2022/23 (Sh681.3 billion), recording growth in absolute terms,” the review report stated.
During the three-month period, the government was expected to raise a quarter of the targeted annual receipt of Sh4.13 trillion, meaning that it had a shortfall of more than Sh250 billion.
Dr Nyakang’o also urged the Treasury to realign the budget through supplementary budgeting early to match the revenue trends.
—Business Daily
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