Improve Kenyans’ income levels before taxing them more, government told

By Robert Mutasi

The International Budget Partnership (IBP) has challenged the Kenya Kwanza government to focus on increasing income among its citizens before raising taxes.

IBP has argued that it is through income that the government can generate taxes for its people.

Speaking during an interview with NTV on Monday, IBP Country Manager Dr Abraham Rugo said it is impossible for the country to raise taxes at the same level of income.

"If we are not discussing how to improve incomes we cannot discuss how to improve taxes, because taxes are an outcome of incomes," said Dr Rugo.

He also advised the government to put more emphasis on how people are earning and ways to increase them.

"It is how well a country is earning and people are earning that matters," he noted.

The IBP Country Manager has further cautioned the government that increasing the level of taxation will be a huge burden to the common citizens with low income. 

Dr Rugo argues that with the proposed tax increase, a majority of Kenyans will be unable to pay them.

"The people who largely showed this tax burden are less than 3 million Kenyans because they are within the net," he said. 

He also cautioned that the moment there will be an increase in tax, consumption will go down.

The IBP boss has further condemned government advisors for failing to come up with proper ways of taxation and instead, they are still blaming the previous regime. 

The government has proposed a number of tax measures in the Finance Bill 2023.

Some of the proposals include increasing income tax for Kenyans earning over Ksh500,000 monthly to 35 per cent, the introducing of digital tax as well as increasing fuel tax from the current 8 per cent to 16 per cent.

The proposals have since been rejected by a section of opposition legislators.