Editorials
Give KRA adequate funds for operations
Friday June 09 2023
Budget and Appropriations Committee Chairperson Ndindi Nyoro (left), National Treasury and Economic Planning CS Njuguna Ndung’u (Centre) and Treasury PS Chris Kiptoo at Hilton Garden Inn Hotel on February 13, 2023, during the Budget and Appropriations Committee meeting to discuss the financial year 2022/23 supplementary budget estimates. PHOTO | LUCY WANJIRU | NMG
During the budget-making process, the Kenya Revenue Authority (KRA) made a plea for more funding to enable it effectively mobilise revenue.
The taxman has over the years requested the Treasury to set its allocation as a percentage of revenue collected, a move which would unlock billions more to fund its operations and improve its ability to nab tax cheats.
It is therefore a good thing that MPs want the KRA handed more funds to hire tax assistants whose main role will be to rope in more taxpayers.
There are millions of eligible taxpayers who have not been contributing to the Exchequer, burdening the few who do and forcing the government to rely on expensive loans to fund its programmes.
Ideally, the solution would be to cut expenditure and reduce wastage. But given the difficulty of achieving this, the government is planning to raise a number of taxes in the upcoming budget to close the wider funding deficit.
As such, the Treasury has set the KRA a target of collecting Sh2.57 trillion in the upcoming fiscal year, which represents a fairly optimistic increase of 17 percent compared to the current year.
The KRA can only achieve such tax growth figures by widening the tax base. Casting the net wider will also allow the Treasury to offer more competitive tax rates that can in turn help Kenya attract foreign investment.
Such an outcome can be best achieved through an optimally funded taxman.
The additional allocation that MPs are proposing should therefore be seen as an investment towards this fairer and more equitable tax regime.
