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President William Ruto pushes for expansion of tax base

President William Ruto. [Denish Ochieng, Standard]

President William Ruto has continued his rallying call of expanding the tax base that he says will be one of the antidotes to the country’s debt crisis.

Speaking during a church service in Nairobi, Ruto asked the congregation to support his plans on raising the government’s revenue in what critics have seen as an aggressive revenue mobilisation plan.

The President stated that despite tax collection registering an improvement over the years, the country still has the potential to collect revenues higher than the Sh2.03 trillion the Kenya Revenue Authority (KRA)collected in the financial year ending June 2022.

He argued that countries in the same income category as Kenya raise between 20-25 per cent of their GDP from taxes, an area Kenya currently lags behind.

“You know our debt situation… As a country, we must move our revenue collection from 14 per cent to 25 percent. From Sh2.1 trillion to between Sh4 and Sh5 trillion,” said the president.

The push for a wider tax base has been at the centre of President Ruto ball game since he took over as president at a time the country is faced by acute drought, high cost of living, a failing economy and rising levels of inflation.

Barely a month after being sworn in as president on September 13, the president gave the KRA a revenue collection target of Sh3 trillion by the end of the next financial year and to double it over the next five years, noting that while improving, tax collections remain far below the potential.

He also directed KRA to seal revenue leaks, and evaluate ways to expand the tax base while approaching the taxpayer in a non-confrontational but firm manner to increase tax collection in line with his new targets.

According to Ruto, the government is focused on financing development projects using taxes owing to the fact that on an annual basis more than Sh1 trillion goes to servicing the public debt that stood at Sh8.6 trillion as of May 2022.

Former President Uhuru Kenyatta's administration borrowed at least Sh7.6 trillion in the 10 years of power to implement his manifesto after inheriting slightly more than Sh1.89 trillion from the Kibaki government in June 2013.

According to a report by Budget experts in parliament, rit will cost up to Sh2.7 trillion for President Ruto’s administration to implement its bottom-up agenda with the first year expected to use Sh473 billion.

Taking a different tangent from the economy, Ruto further told the congregation that fixing the country would also mean securing its environment even as the country feels the devastating effects of climate change that has led to the most biting drought in over 40 years. Part of his plan is to work with Kenyans to plant 15 billion trees.

“I need help with changing our environment. We have purposed to grow 15 billion trees. Part of why we have drought and the situation we are in is a contribution from the world but we have a role to play as a nation,” said the head of state.

The push for reforestation comes days after first lady Rachel Ruto adopted 200 hectares of the Kakamega equatorial forest as part of her move to conserve the environment and fight the negative impacts of climate change.