Thanks to the demands by the IMF, it appears that the state of Kenya will be “forced” to raise taxes on its “citizens.”
|Tough times ahead as State gives in to IMF|
Kenyans should brace themselves for higher taxes after the Government caved in to the International Monetary Fund’s (IMF) demands. Treasury agreed to tough conditions spelt out by IMF, including the repeal of some tax exemptions enjoyed by key sectors of the economy.
It made the commitment to the IMF in a letter of intent that spells out a raft of measures that are likely to eat into consumers’ pockets. One of the key conditions accepted by the Government is a removal of some tax exemptions that will weigh on some sectors of the economy. The sectors to be hit include agriculture, manufacturing, education, health, tourism, finance, social work, and energy.
A tax haven for milk, maize flour, and sugar will come to an end in the next financial year. Petrol products Treasury has indicated that petroleum products, which had been exempted from consumption tax, will attract 16 per cent VAT beginning September in a move aimed at complying with a deal Kenya made with IMF in 2015. Avoid fake news! Subscribe to the Standard SMS service and receive factual, verified breaking news as it happens. Text the word ‘NEWS’ to 22840 Treasury expects to get an extra Sh17 billion from taxes on petroleum products. According to the World Bank, there are about 30 tax-exempt income categories accounting for 88 per cent of total exemptions.