Treasury to introduce new taxes as it seeks additional Ksh.900B from Kenyans

The national treasury will seek an additional Ksh.900 billion from Kenyans in the next financial year by expanding its tax base and introducing a raft of new taxes to reach this target. 

In the financial year 2023/2024 National Treasury CS Prof. Njuguna Ndungu will seek to collect Ksh.3 trillion from Kenyans to fund the Ksh.3.6 trillion 2023/2024 financial year budget, with the focus on implementing economic recovery strategies of the new administration to re-position the economy on a steady and sustainable growth trajectory.

The Kenya Revenue Authority (KRA) will have an uphill task in the next financial year as they will be tasked with collecting Ksh 3 trillion from Kenyans in what many consider to be a struggle.

In his 2023 Budget Policy Statement (BPS), Treasury boss Prof. Ndugu outlined measures that he will use to achieve this, including cutting all tax exemptions, increasing revenue collections by expanding the tax base and reducing government expenditure.

Some of the measures that will be employed by the tax man to increase collections include; Integration of the KRA tax system with the telecommunication companies which would allow KRA to monitor mobile money transactions, Tax base expansion in the informal sector since it has a potential taxable base of Ksh. 2.8 Trillion.

Others include the Implementation of Rental Income Tax Measures by mapping rental properties and increasing VAT collections by fully rolling out the electronic Tax Invoice Management System.

These measures are expected to net the taxman an additional Ksh.900 billion shillings.

To finance the deficit, the government will borrow Ksh.498 billion from the domestic market and Ksh.198 billion in external financing.

In the policy statement, the lion's share of the budget will go to the Ministry of Education, which will be allocated Ksh.525.9 billion.

The Transport and Infrastructure docket will be allocated Ksh.222 billion which will be used for the completion of priority infrastructure projects pending in the country.

The National Treasury will get Ksh.189 billion, with the Interior Ministry getting Ksh.143 billion.

The Health docket will get Ksh. 126.3 billion with the Ministry of Agriculture expected to get Ksh.63.89 billion and the Ministry of Defence Ksh. 121 billion.

The judiciary has been allocated Ksh. 18 billion, with the Office of the President getting Ksh.8.1 billion.

The national treasury says it will eliminate non-priority expenditures such as expensive and unsustainable consumption subsidies, reducing tax exemptions, and scaling up the use of Public-Private-Partnerships financing for commercially viable projects.