• The IMF revealed it was discussing new tax reforms with government officials that would be “acceptable” to taxpayers and stakeholders.
• This follows the conclusion of the seventh and eighth reviews of the Extended Financing Facility and the Extended Credit Facility.
• President William Ruto’s government will restore some of the tax provisions it removed from the controversial Finance Bill 2024, which was repealed

TUKO.co.ke journalist Japhet Ruto has over eight years of experience in financial fields, businessand technology reports and provides in-depth insight into Kenyan and global economic trends.

The International Monetary Fund (IMF) has advised President William Ruto’s government to introduce new tax measures to increase revenue.

Why the IMF wants the government to introduce new taxes

According to the Bretton Woods institution, Kenyan authorities face a difficult balancing act: increasing domestic revenue to protect critical spending in priority areas while meeting onerous debt service obligations.

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THE IMF revealed it was engaging with government officials on new tax reforms that would be “acceptable” to taxpayers and stakeholders.

This follows the conclusion of the seventh and eighth reviews of the Extended Financing Mechanism, with a disbursement of KSh78.1 billion.

“Going forward, we remain committed to our revenue-driven fiscal adjustment strategy through renewed efforts to broaden the tax base and improve compliance, as well as rationalize recurrent expenditures. To achieve this, we are actively engaging a broad range of stakeholders who will inform our tax reforms to ensure they are socially and politically acceptable while preserving the goal of making the tax system more efficient and equitable.

Accordingly, we are committed to introducing measures that broaden the tax base, carefully assessing and, where possible, offsetting unintended distributive effects to ensure fairness and progressivity,” said the IMF declared.

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What bills will Treasury reintroduce?

President William Ruto’s government is set to restore some of the tax provisions it removed from the controversial 2024 Finance Bill. which was repealed after massive anti-government protests.

THE National Treasure will combine tax reforms into three new bills.

These are the Taxation (Amendment) Bill, 2024, the Tax Procedures (Amendment) Bill, 2024and the Public Financial Management (Amendment) Bill, 2024, which will be presented to Members of Parliament (MPs) for debate.

The 2023 finance law is legal

Elsewhere, the 2023 finance law, loaded with taxes, will remain in force after Supreme Court overturned the decisions lower courts, which overturned it.

The Court of Appeal and the High Court admitted the petitioners’ arguments who made holes in the finance law, with particular emphasis on public participation.

The Chessboard currently receives income in line with the provisions of the Finance Bill 2023, following President William Ruto’s decision to cancel the Finance Bill 2024.

Source: TUKO.co.ke