The National Treasury on Thursday, May 30 published the National Tax Policy which outlined tax strategies the government will employ to raise more revenue to fund the budget.
As detailed in the policy, Treasury listed four sectors where taxation has not been fully implemented, hence the need to prioritise the areas going forward.
Among the sectors that were listed include; property transfers, land transfers, the agricultural sector and the informal sector.
Therefore, as part of the strategy, the government noted that it would be keen on enforcing tax compliance during land and property transfers.
On the other hand, the government indicated that it would seek to expand Kenya Revenue Authority (KRA) offices across the country to target the informal sector.
"The government will explore mechanisms for collecting taxes from the informal sector such as the appointment of tax collection agents.
"The government will also roll out education programmes to farmers and informal sector groups on taxation," read the policy document in part.
Similarly, the government noted that it would be leveraging information sharing with various government institutions as part of the strategies for ensuring compliance.
"The economy is dominated by a large informal sector, which is difficult to tax. The sector is characterised by poor record keeping, cash-based transactions and limited information due to its unregulated nature.
"For instance, the actual contribution to tax revenue of the agricultural sector, which forms a major part of this category, is not commensurate to the sector’s contribution to GDP which averages 21.4 per cent," read the policy document.
Further, the National Treasury explained that the new policy was important given that previous interventions had not proved to be as successful as planned.
Some of the earlier strategies that were introduced for the informal sector include follow-up on taxes through the use of turnover tax and presumptive income tax.
