VAT in Kenya in focus
The Value Added Tax, VAT in Kenya is expected to receive renewed attention from President, Dr. William Ruto as he declared his willingness to improve the country’s economy by dealing with tax issues such as the VAT refund headache that has plagued the country for a long time.
The mention of the value-added tax administration is in line with President Ruto’s move since his inauguration, to grow the Kenyan economy through effective tax administration.
His administration in addition to effective taxation aims to quadruple the annual supply of housing units which is currently 50,000.
During his Mashujaa Day address, Dr. Ruto pointed out that despite the VAT in Kenya exemption on inputs being enacted to lower construction costs, investors are yet to reap the benefits.
He then promised to ensure immediate refunds of VAT on construction inputs to resolve challenges hindering investment and close the housing gap of two million units.
The President mentioned that delays in the implementation of the VAT exemption on items such as steel, cement, and paint lead to the high cost of construction which will make it almost impossible for regular Kenyans to own their dream home.
There are also plans to ensure a predictable tax regime for manufacturers and create more jobs in the manufacturing sector, all part of his administration’s efforts to ensure economic growth.
VAT in Kenya: A Quest to Increase Tax Collection
To help settle the country’s debt of Sh8.2 trillion, President William Ruto has urged Kenyans to be more consistent with their tax payment.
Dr. Ruto during a thanksgiving service in Kitui Central constituency stated that for the country to become independent, it should be able to function well and develop without reliance on foreign debts.
He revealed that the government is focused on financing development projects using taxes and then appealed to Kenyans to pay taxes to help the government fulfil its mandate for Kenya to be an independent nation.
The President mentioned that his administration is working hard to settle the country’s huge debt which currently stands at Sh8.2 trillion.
He pointed out that if the country can increase its tax collections from the current Sh2 trillion, it won’t need to keep borrowing from other countries.
The Kenya Kwanza administration aims to generate KSh 3 trillion by 2023, and before the end of four years collect KSh 4 trillion.
This comes days after Treasury CS Ukur Yatani, explained that the country has never defaulted on any of its creditors after word got out that the Chinese banks have fined the country $11 million for failing to repay loans used to finance a major railway.
The government had previously borrowed $4 billion to build the Standard Gauge Railway from the port of Mombasa to Naivasha town.
In the current statistics, China accounts for one-third of Kenya’s external debt.
