Foreign Affairs Principal Secretary (PS) Korir Sing’oei on Sunday revealed that tax measures proposed in the Finance Bill 2024 held the key to the International Monetary Fund (IMF) releasing a Ksh575 billion loan for Kenya.
PS Korir who was speaking during a press briefing of President William Ruto’s state visit to the US was responding on why IMF was taking so long to review the loan.
While being optimistic that the 7th Review would be concluded, the PS explained that it hinged a lot on how much Kenya was able to raise through revenue collection.
This has been a condition by World Bank and IMF where Kenya must routinely show it has the ability to honour international debt obligations through its own source revenue.
“We have a comprehensive program ongoing with the IMF, our discussions with IMF presently relate to tax measures and in particular with revenue-raising measures which the government is proposing,” Korir explained the correlation between raising taxes and Kenya accessing the loan.
While the Finance Bill has identified areas to increase taxes, the proposals could still be shot down in Parliament.
This could be why the IMF is reluctant to issue the loan until the Bill is assented to law by the President.
“Of course, you know that the Finance Bill is out in Parliament ongoing its own internal processes but because of the complexities of all these issues that are on tax revenue, it has taken quite a long time for there to be a consensus between Kenya and the IMF,” the PS spoke of the issue.
PS Korir further regretted that African countries including Kenya were being given strict conditions while accessing loans from foreign markets.
It was announced that this was one of the issues that Ruto would bring to the attention of US President Joe Biden during a bilateral meeting on Thursday, May 23.
According to the Foreign Affairs PS, there was a need for a radical shift in regard to the terms and conditions by which Africa accesses credit.
Initially, the IMF had remarked that the review was taking too long because of the flood crisis experienced across the country.
