× Business BUSINESS MOTORING SHIPPING & LOGISTICS DR PESA FINANCIAL STANDARD Digital News Videos Health & Science Lifestyle Opinion Education Columnists Moi Cabinets Arts & Culture Fact Check Podcasts E-Paper Lifestyle & Entertainment Nairobian Entertainment Eve Woman Travelog TV Stations KTN Home KTN News BTV KTN Farmers TV Radio Stations Radio Maisha Spice FM Vybez Radio Enterprise VAS E-Learning Digger Classified Jobs Games Crosswords Sudoku The Standard Group Corporate Contact Us Rate Card Vacancies DCX O.M Portal Corporate Email RMS
×

EABC backs new minimum tax on informal businesses

NEWS
By Frankline Sunday | January 22nd 2021

East African private sector has asked Treasury to implement the one per cent minimum tax on informal businesses to increase revenue collection and stimulate economic growth.

East African Business Council Chairman Nicholas Nesbitt said yesterday the government’s increased borrowing from the domestic market and falling revenue collection starve the private sector of credit and worsen the challenge of pending bills experienced by many suppliers to government. 

“The constant conversation is to expand the tax net and the minimum tax is one of the ways to do this,” he said during the launch of a report by the East African Business Council on the state of the East African economy.  

The tax on gross turnover came into effect this month and is payable on three-month installments.  

EABC says the tax could assist the Kenya Revenue Authority bring the informal sector into the tax bracket.

“Think of the number of boda bodas, for example, each of them generating a few hundred shillings a day and at the end of the year they are making money but nobody knows it, and they are not paying taxes,” Nesbitt said.

“Think about a million boda bodas making a few hundred shillings a day and what that means if they pay one per cent of that in terms of tax per day.” 

Nesbitt, however, said scrapping the tax reliefs introduced during the pandemic last year was a misstep on the part of the government.

“As Winston Churchill said, taxing your people out of a recession is trying to lift yourself while standing in a bucket,” he said. “You can’t do it.”

Share this story
Kenya Airways resumes international flights
The first international flights will be to London, Dubai, Addis Ababa, Kigali, Dar es Salaam and Lusaka.
Property developers ride on holiday homes wave
Short-term rents such as Airbnb have become popular with buyers who don’t reside in the houses throughout the year.
.
RECOMMENDED NEWS
Feedback