Kenya should seal tax loopholes: IMF

The International Monetary Fund (IMF) has given Kenya tough conditions for accessing credit. Most notable is that the budget deficit must be trimmed by up to 3 per cent for the country to get an emergency loan from IMF.

Though the government tries as much as it can to spend from its own tax coffers, tax collection falls short, hence the deficit. IMF is telling Kenya that it can do better. Even as it strives to collect more from taxes, it should check its debt level which has been balloning. It should also slash its recurrent expenditure on salaries and other emoluments. However, people need not lose jobs for there to be great savings.

Moreover, work on the Standard Gauge Railway, Lamu Port and roads and highways need not come to a halt. The silver bullet to reducing our budget deficit is tackling corruption head-on. It is estimated that each year, Kenya loses billions of shillings from graft as crooks working in cahoots with KRA officials channel into their pockets monies that should have gone into healthcare, education, roads and security. Also, corruption increases the cost of doing business.

Indeed, corruption might be a major reason why the Kenya Revenue Authority (KRA) is always missing its tax collection target, even from legitimate businesses.