Henry Rotich

Time to widen tax base

The Treasury is once again looking to tweak Pay-As-You-Earn (PAYE) taxes in its bid to grow public revenue by Sh68 billion to Sh447.6 billion in 2018/19.

Estimates of revenue, grants and loans for the 2018/19 fiscal year submitted to Parliament show that corporation tax revenue is also expected to increase by Sh59.5 billion to Sh389.2 billion.

In other words, more attention is being placed on the direct taxes on incomes and profits rather than indirect ones levied on goods or services as Treasury secretary Henry Rotich seeks ways of financing the Sh2.53 trillion budget.

We caution the Treasury not to focus so much attention on the already overburdened formal workers and corporate profits. There is need to widen the tax base to rope in the fast growing real estate as well as the informal sector which accounts for more than 80 per cent of the new jobs that the economy generates each year. The Treasury must leverage on technology to boost tax administration and widen the collection base.

Above all, the Treasury also needs to impress upon other law enforcing agencies to work in concert to so as to rid the market of fake goods through which excise taxes running into billions of shillings are lost every year.

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