Following President William Ruto's directive on November 21, 2022, asking government agencies to expand the country's tax bracket, Treasury on Wednesday, January 18, 2023 released a draft 2023 Budget Policy Statement that sought to seal tax loopholes.
In his directive, the head of state noted that despite tax collection registering an improvement over the years, the country still has the potential to get more than Ksh2.03 trillion.
In response through the draft 2023 Budget Policy Statement, Treasury outlined measures that will ensure that tax cheats are forced to pay their fair-share.
"As part of the economic turnaround plan, the government will scale up revenue collection efforts to Ksh 3.0 trillion in the FY 2023/24 and Ksh 4.0 trillion over the medium term.
"Close monitoring of payments from the government to ensure correct taxes are declared and paid will be done accordingly," the draft 2023 Budget Policy Statement read.
In order to achieve this target, government agencies responsible for collection and enforcement of tax policies will have the capacity to monitor mobile money transactions.
The government intends to integrate mobile money systems within the domains of telecommunication companies with tax collection and enforcement agencies in order to make surveillance possible.
"The Government will undertake to roll out electronic Tax Invoice Management System (eTIMS), reduction of Corporate Income Tax (CIT) gap from 32.2 percent to 30.0 percent of the potential as envisaged in the KRA Corporate Plan and integration of tax system with the Telecommunication companies (Telcos)," the draft 2023 Budget Policy Statement read.
In the draft 2023 Budget Policy Statement, Treasury is working on measures to curb taxes that are lost in counterfeit businesses.
"The prevalence of counterfeit excisable products and stamps in the market will be addressed through formation of a multi-agency team to investigate source of counterfeits and take necessary action," the draft 2023 Budget Policy Statement read.
Members of the National Police Service (NPS), the National Intelligence Service (NIS) and other agencies will use information available to be more effective in their activities.
"Data and intelligence-driven field operations to take down counterfeiters; robust and effective market surveillance; regular reviews and upgrades of the security features of stamps and rolling out new excise stamps should it be deemed necessary," the draft 2023 Budget Policy Statement read.
Treasury is confident that government agencies will not fail on a presidential directive that ordered for an expansion of the national tax bracket.
"Kenya is a global leader in financial innovation with access to formal financial services standing at 83.7 percent in 2022 largely attributed to the progress made by Kenya to expand financial access through various channels including mobile money financial platforms," the draft 2023 Budget Policy Statement read.