Reducing tax burden on formal workers won't hurt State revenues

Reducing tax burden on formal workers won't hurt State revenues. [iStock photo]

The the national budget statement will be read. The numbers will dominate the headlines, but their true significance lies in what they mean for ordinary Kenyans, businesses, and savers. 

Approximately 3.5 million Kenyans are employed in the formal sector, just 16.2 per cent of the total workforce, while the remaining 83.8 per cent toil in the informal economy, largely outside the tax net. Yet formal sector workers shoulder the heaviest burden of tax collection apparatus, contributing the lion's share of the Sh2.2 trillion that the Kenya Revenue Authority targets annually.