Prime Cabinet Secretary Musalia Mudavadi has affirmed that the tax regime in the country is not punitive.
Mudavadi said that measures being undertaken by the taxman are aimed at stabilizing revenue collection parameters government due to the economic distress the country experiencing.
For the country to get out of its current situation, Mudavadi said Kenyans must embrace collection of own revenue, adding that the Government is working to seal tax evasion loopholes.
“There is no country that grows and becomes economically stable without taxing its people. Government gets its revenue to undertake its functions only through borrowing, which leads to debts and taxes collected from its people. Even in developed countries nobody likes or enjoys paying tax. But that remains the rule of thumb for a country to sustain itself,” Mudavadi said.
Mudavadi said it is time for Kenyans to be patriotic, noting that pain might be experienced now but there is light at the end of the tunnel.
He stated that no regime is happy to overburden its citizens with tax, saying once things stabilize and get back on the economic growth path, it will be a relief for Kenyans within the tax regime.
“We are working hard as government to seal the loopholes of tax evasion even as we look for other avenues on how we can generate revenue. What we are encouraging and working on is expanding the tax bracket and not increasing taxes. That is why we are looking for opportunities for creating more jobs so that many people can be enrolled in the tax payment quarter,” said Mudavadi.
According to Mudavadi, measures being put in place by government in streamlining domestic revenue collection will in the long run help in stabilizing the tax levels being experienced.
Mudavadi who is also the Foreign and Diaspora Affairs the Cabinet Secretary noted that Kenya is strengthening its diaspora as a key pillar in building the country’s economy citing that the current remittance from the Kenyan Diaspora is very encouraging.
“What the country is collecting from Kenyans living abroad at the moment is almost surpassing our export targets. This is a key indicator that we need to have a stable foreign policy that will help us further our partnerships with other countries since we have seen this forms part of what helps us grow our country economically.” said Mudavadi.
Mudavadi who was speaking during an interview with a local radio station also defended the governments’ plan to privatize some of the state-owned companies and parastatals
Under the Privatization Bill, 2023 that is now law, he said the government is allowed to undertake privatization of non-strategic performing state-owned enterprises whose returns will help add value to cater for support in other key areas of the economy that include but not limited to infrastructure in transport, water, health and education.
According to Mudavadi, all the steps that will be undertaken must be anchored on the law to avoid casting any doubts on Kenyans.
“What we want to encourage is proper management of these state-owned parastatals for them to generate revenue instead of government pumping in money day in day out to sustain them. Kenyans should take leaf on what happened to KCB which was 100 per cent owned by government some years ago and what happened at Kenya Posts and Telecommunications Corporation (KPTC) a government company that provided telecommunication and postal services across Kenya.” said Mudavadi.
Mudavadi says Safaricom, which is the leading company in revenue remittances in the country was as a result of privatization at KPTC citing the need to look at the bigger picture of return on investment.