The directorate of President Ruto has organized a new set of taxes that includes road taxes which will be introduced in October if the High Court blocks the Finance Act, of 2023.
The Treasury has indicated that it is arranging the new taxes in revelation to the International Monetary Fund. This will include vehicles circulation tax, excise and value-added tax (VAT) measures, in a contingency plan to fund the Ksh3.68 trillion budget if the tax that has been suspended at the moment runs into a problem in court.
“The authorities stand ready to adopt contingency plans that could include new excise and value-added tax (VAT) measures. They intend to submit to Parliament these contingency measures by end-October 2023 to support confidence in fiscal consolidation and the continued reduction of Kenya’s debt vulnerabilities.” the IMF said.
The Treasury’s promise to the IMF could mean Kenyans will not have an exit from the threatening tax that includes a doubled VAT on fuel at 16 percent. Excise and VAT are consumption taxes, meaning they will hit even more taxpayers.
Read Also: Court Of Appeal Upholds High Court Order on Finance Act
Last week the Kenya Revenue Authority (KRA) disclosed that it had raised Ksh2.166 trillion in the financial year that ended in June. It recorded a shortage of Ksh107 billion that is against a target of Sh2.273 trillion.
The IMF says in its latest review that Kenya has met the conditions that allowed approval of approximately Ksh141.8 billion and it need not to compromise on the agreed posture that includes the removal of subsidies and rolling out new taxes to cater for the country’s reliance on debt.
“Unrest could reemerge in connection with protests against the higher cost of living, need to raise more taxes and electoral process supported by the political opposition.” The IMF said.
They also added that the policy response by the government should be to “remain committed to reforms under the program.”
The High Court suspended the implementation of the Finance Act last month and took the matter to the Supreme Court, yet the Energy and Petroleum Regulatory Authority (Epra) disregarded this and applied a 16 percent VAT in its analysis of prices.
Chief Justice Martha Koome has appointed a three-judge bench to hear the case challenging the implementation of the Finance Act, 2023.
Busia Senator Okiya Omtatah, who filed one of the petitions against the Finance Act, has applied to have the energy regulator cited for contempt of court.
Martha Koome has appointed a three-judge bench to listen to the case affecting the implementation of the Finance Act, 2023.
Senator Okiya Omtatah, who filed one of the petitions against the Finance Act, has applied to have the energy regulator mentioned for contempt of court.
Subscribe to our YouTube channel Switch TV
