Kenya Calls for Input on Tax Policy Making

The National Treasury has called on businesses and individuals to have their say on a policy document that will inform how taxes should be restructured in the country. 

In a policy paper which requested views on the revision of Kenya’s revenue system, the finance office noted that it wants to understand how present policy measures shape investment decisions by businesses.

National tax policy seeks to expand the tax base to boost fairness and equity in the tax system as well as embrace the international best practice in tax administration.

Further, the draft policy is also meant to create certainty and predictability of the tax regime, enhance tax compliance, and reduce tax expenditure.

“This National Tax Policy provides policy recommendations to address the challenges currently facing the taxation regime in the country such as huge informal sector that is hard to tax, the unpredictability of tax policies, huge tax expenditure poor compliance among others,” noted Treasury CS Ukur Yatani in a statement that advised views must be submitted by August 5.

Changes in taxes on smartphones and SIM cards are set to hurt Kenyans as the Finance Act 2022 was signed by President Uhuru Kenyatta in June. 

Mobile operators like Safaricom have started the implementation of Sh50 excise duty on SIM cards and a 10 percent excise tax on imported phones as part of the move.

In part Safaricom’s notice to its consumers, Safaricom noted that effective today the firm will be reviewing their SIM card pricing to Sh.50 + Sh.50 airtime first top up to include the excise tax. Phone prices will be adjusted to include the 10 percent excise tax and 25 percent import duty as existing stock levels are replaced with new stock on which the tax apply.

Kenya’s tax system notoriously continues to suffer numerous challenges leading to underperformance in revenue collection with Kenyans painstakingly the most taxed.

According to a report by the Organisation for Economic Co-operation and Development (OECD), Kenya ranked third after South Africa and Swaziland as top African countries where individuals pay more taxes, this is compared to profit taxes from corporations.