Trade Cabinet Secretary (CS) Moses Kuria on Monday said Kenyans are overburdened by the high cost of power.
The CS, who spoke during an interview on Citizen Television, further stated that expensive electricity costs were forcing some companies to shut down over their inability to sustain the high cost of production.
“In Kenya, the power bill is saddled with so many charges and levies,” Kuria said on Monday Report on February 20.
“You cannot keep using the power bill as a revenue collection agency. This is a conversation that we are going to have. The energy sector is an industry that subsidises the rest of the [Kenyan economy because of the high revenue it generates],” added the minister.
Kuria said the power consumption laws in Kenya are punitive to large users, whom he says, “end up subsidising costs for small scale users”.
“The manufacturing companies cannot continue to subsidise energy for me and you, yet we expect the sector to be a source of employment. The energy pricing structure is designed in such a manner that the more you consume, the more you pay. In the end, it is the industries that subsidise the consumer,” he said.
“In other countries, the industries are charged cheaper than the rest of the economy.”
The minister stated “something needs to be done” about the cost of power in Kenya.
To avoid over-relying on certain sectors of the economy to raise taxes, Kuria said the Kenya Revenue Authority (KRA) should come up with ingenious ways of collecting levies.
“For instance, how do you allow someone to bet, then the money is received by the betting company, and then KRA goes to the betting firm and asks to be given what is rightfully theirs? That is not a wise tax-collection model. The clever way to do it, is by asking the mobile money companies to deduct the taxes upfront,” said Kuria.
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“If you are more innovative than imaginative, we can be able to raise our revenue without necessary raising the taxes,” he added.
The Cabinet Secretary says he is of the school of thought that more taxation doesn’t necessarily mean more revenue for the government.
“Perhaps some more efficient tax administration would give us more revenue,” he said, stating that punitive tax measures were discouraging local companies from expanding and foreign investors from pitching camp in Kenya.
The CS also accused cooking oil manufacturers of buying the commodity from Indonesia, repackaging it in Egypt and selling it to Kenyans at exorbitant prices.