New policy fails to deliver tax predictability, expand tax base

The National Tax Policy sets the tone for what would be an ideal tax policy for Kenya. [Courtesy]

Kenyan businesses and households are still struggling with an unpredictable tax regime that is also heavily reliant on a small pool of taxpayers three years after it started implementation of the system. 

The National Tax Policy, whose implementation started in 2023, was expected to make taxation in the country predictable but also expand the tax base, roping in what are termed as hard-to-tax sectors including agriculture, informal sector and the digital economy. This would in turn increase tax revenues, reduce the speed of borrowing to plug in budget holes and reduce reliance on the few taxpayers.