Government’s tax reforms to promote economic growth without burdening citizens
SHARON ATIENO- KNA
The proposed new tax laws aim to foster sustainable growth, safeguard social equity, and improve the quality of life for Kenyans without increasing the burden on citizens.
Government Spokes person Dr. Isaac Mwaura noted that in the past two years, the government’s agenda has prioritized job creation, income distribution, and economic stability, all of which are designed to support its commitment to creating an economic environment where all Kenyans can thrive.
“The government is committed to implementing policies that not only address cur rent fiscal needs but also strengthen the nation’s economic foundation for the future,” Mwaura stated.
“With rising public debt, we must implement balanced measures to ensure a sustainable public debt position. Our goal is to develop an economy that relies more on robust domestic revenue generation than on foreign debt,” Mwaura added.
Speaking during a press briefing, Mwaura explained that the government will allocate more resources to critical projects that benefit citizens, which is why the proposed tax reforms are necessary.
These reforms aim to establish a fair tax policy, including measures for tax amnesty.
“The National Treasury and related government bodies have introduced amendments to existing laws, in line with the constitution to ensure a balanced tax system. These changes are de signed to support better tax administration and compliance, ensuring that every citizen pays a fair share,” he said.
Mwaura stated that several legislative amendments including the Tax Laws (Amendment) Bill, 2024, the Tax Procedures (Amendment) Bill, 2024, and other related bills, have been prepared to address the growing fiscal demands and ensure efficient revenue collection.
He highlighted the benefits of the Tax Law Amendments, including enhancing county government funding, to avert potential service delivery challenges.
Others include enhancing social and economic well-being to improve the economic welfare of all Kenyans, equity and fairness in provisions for justified tax amnesty and adjustments to tax expenditures and improved tax compliances that combat tax evasion for the nation’s growth.
Further, he added that digital economy growth will expand the digital tax base. Mwaura emphasized the benefits for Kenyan employees and businesses including improved employee benefits, support for pension and retirement funds, since deductions for registered pension or retirement contributions will benefit both individuals and employers.
Other benefits for employees and business include fair and competitive business environment through business law amendments through the Ministry of Trade, Investments and Industry which has introduced amendments to enhance the ease of doing business, attract investments, and improve export performance, local manufacturing and procurement which mandates that at least 40 per cent of goods and services procured by the government to come from local manufacturers, spurring economic growth and job creation.
“These amendments are part of a larger plan to stabilize the Kenyan economy. Our debt currently stands at 68 per cent of the Gross Domes tic Product (GDP), we aim to reduce reliance on foreign debt, align with global best practices, and secure financial stability for future generations,” he said.
Mwaura under scored the government’s commitment to build public trust and ensure that all tax revenues up lifts Kenyans through its efficient and transparent use that enhance service delivery in sectors including health, housing.
He stated that public hospitals across counties including Makueni, Nakuru, and Kisumu, as well as at major maternal hospitals such as Pumwani and Mama Lucy, patients, and healthcare providers are witnessing the positive impact of SHA.