Thursday, April 8, 2021 – Reality is dawning on Kenyans over the controversial Sh255 billion loan that the government of President Uhuru Kenyatta has taken from the International Monetary Fund.

This is after the Kenya Revenue Authority (KRA) unveiled plans to expand its tax base to raise the money.

This new development comes barely three months after the taxman introduced new taxes in the face of a stagnating economy due to the impact of the Covid-19 pandemic.

In its new plan, KRA is looking to implement several measures that are highly likely to see the country’s tax base expanded.

These measures include the implementation of post-clearance audits, comprehensive audit of all exemptions, enhanced scanning, and intelligence-led verification of cargo at the ports of entry to meet its targets.

The move comes after KRA recorded an 11.2 percent increase in tax with a total of Ksh144 billion collected in March 2021.

The state has been under pressure from the IMF to increase taxes with suggestions floated that the Value Added Tax (VAT) on all petroleum products might be doubled to reduce its budget deficit.

The IMF noted that the country needed to raise the VAT to 16 percent from the current eight percent.

“If needed to meet fiscal objectives, capitalise on lower fuel prices by aligning fuel VAT to the standard rate.”

“Oversupply and volatility in the oil market would be a positive shock for Kenya, easing potential external balance pressures from other sources,” advised the IMF.

The National Treasury committed to increase taxes and reduce its wage bill in order to receive the Ksh257 billion IMF loan that has irked Kenyans.


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