Treasury Cabinet Secretary Njuguna Ndung'u has asked Kenyans to prepare for more taxation to spur economic growth.
Ndung'u explained that tax contributions from Kenyans are too low to make significant economic growth to jumpstart the country's growth.
The CS was speaking on Friday, August 11, at a Mombasa hotel at a joint retreat between committees of the National Assembly and officials from the National Treasury.
"Taxation provides the basis for growth, reliance on debt and borrowing on other people’s savings will not yield tangible development, hence need to raise revenue from domestic sources," Treasury noted in a statement.
Ndung'u explained that Kenya's public debt has called on the government to seek alternative revenue sources to fund development.
"Among key issues covered include the fiscal deficit for FY 2023/24 which currently stands at Ksh718.9 billion, and how the deficit will be financed through borrowing from external and domestic sources," the National Treasury stated.
Ndung'u stated that the Kenyan tax regime is progressive, which means that the higher your income, the higher the percentage of tax you pay.
Despite the pain, CS Ndung'u explained that the Kenyan economy is projected to grow by 5.5 percent in 2023, according to the monitoring indicators.
He attributed this growth to a recovery in the agriculture sector, which was hit hard by a drought in 2022 and increased tourism, as the country reopens to international visitors.
Ndung'u explained that the slow growth is a result of strong growth in the services sector, which accounts for the majority of Kenya's Gross Domestic Product (GDP).
CS Ndung'u also noted that increased investment by the government in infrastructure projects will spur growth.
"The economy is expected to grow at a healthy pace in 2023, but there are some risks that could derail this growth. The government will need to take steps to mitigate these risks in order to achieve its economic growth targets," Ngung'u explained.
