President William Ruto
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In 2023, President William Ruto shocked Kenyans with a series of comprehensive tax measures influenced by the country's partnership with the International Monetary Fund (IMF).
In his Jamhuri Day speech, the President defended these measures as crucial to avert looming economic turmoil. The focal point of this financial strategy was the controversial Finance Act 2023 passed by the National Assembly in June to generate an additional Sh211 billion to accommodate rising debt service costs within an expanded budget. The implementation of a 1.5 per cent housing levy, the doubling of VAT on petroleum products to 16 per cent, and increased mobile money transfer fees have stirred distress among both employers and employees.
The Finance Act 2023 went beyond traditional tax domains, extending its reach to the digital landscape by introducing taxes on the transfer of digital assets and tripling the turnover tax to three per cent. Mobile phone users felt the pinch as the excise duty climbed from 12 to 15 per cent, prompting leading telecom company Safaricom to adjust its M-Pesa fees upward by three per cent. Advertisers promoting alcoholic beverages, betting, gaming, lotteries, and prize competitions across various media platforms faced a new hurdle with the introduction of a 15 per cent excise duty.
The Act revamped the tax brackets for monthly employment income, introducing two additional tiers. Earners above Sh500,000 would now face a 32.5 per cent tax rate while those surpassing Sh800,000 were subject to a 35 per cent tax rate. In July, club entrance and subscription fees became taxable benefits, providing employers with the option to deduct this expense from their income.
Imported glass bottles, excluding those for pharmaceutical products, faced a hike in excise duty from 25 to 35 per cent. Content creators on social media were not exempt, as the Act imposed a withholding tax of five per cent for residents and 20 per cent for non-residents without a permanent place of digital content monetization. The tax ripple extended to electronics dealers including mobile phones as a 10 percent excise duty on imported cell phones led to challenges and shortages for smartphone importers.
To ensure tax compliance among small businesses, the Kenya Revenue Authority (KRA) introduced Revenue Service Assistants. Meanwhile, state departments increased fees and fines for services like passport processing and marriage certificates.
Comments
You add IMF loans to the Chinese loans,and Mwananchi will soon crack under the weight.Yes it's easy to just raise tax on the backs of hardworking Kenyans.What a shame. Sadly what have these loans done? Infra-structure that was supposed to be in place 35 years ago is just teetering along...
Had these funds been put to good use, Ruto would not be squeezing the poor Kenyans for revenue.We would be getting that from other productive sources.
And enough of blaming the previous regime. Wasn't Ruto part of it?
Daylight Robbery.
😂 it’s so sad, it’s funny.
Those who oppose secession should pay their taxes silently.
Kenyans are being robbed by the government of Kenya.
He was their (I.M.F//W.E.F//World bank) chosen candidate.They don't care for serfs and peasants who will continue to face tough times ahead. And possibly riots.
Zambia Ghana and now Ethiopia defaulted on Euro "bone". Kenya excited to have paid the first interest installment. Just imagine paying interest not principal. It's severe slavery.
Africa nations put themselves in danger by borrowing and not growing economy. Ruto received zero per cent IMF loans but aggressive tax collection from every nook and crany is required. He's a true strong arm taxman.
This year will be worse than last year but, but will be better than next year. Thank to will am ruto
The IMF is pressing Ruto to oppress the Kenyan people so they can monetarily benefit through stiff tax collection!
Kenyans are now left between a rock and a very hard place because they have over sacrificed to keep the IMF happy, and to provide extra revenue from which Ruto will steal!
The state house functions and Ruto’s excessive foreign trips should be drastically curtailed until economic situation in the country improves. It is only fair such measures be taken to control wasteful spending and corruption!