The Kenya Revenue Authority (KRA) is looking into ways of raising more taxes from the Small and Medium Enterprises (SMEs) sector.
KRA Acting Commissioner for domestic taxes Mwangi Mugo said the MSME sector contributes 35 to 45 per cent of GDP and up to 70 per of employment. Yet, they only contribute six per cent of domestic revenue.
“We are engaging them so that we see if we can raise their tax contribution to at least 20 per cent,” he said.
Speaking in Embu, Mugo noted that MSMEs held the greatest potential for revenue growth.
On his part,Kenya National Chamber of Commerce and Industry(KNCCI) Embu Branch Chairman Mugo Mate told KRA to consider giving new businesses tax holidays to generate more taxpayers.
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He said new businesses are usually beset by enormous costs such as “premises goodwill,” customizing the premises to purpose and marketing, which can easily kill the potential taxpayers.
He said even as they encourage their members to pay due taxes; KRA should talk to those who prepare budgets at the Ministry of Finance so that they reduce the tax burden on individuals.
Mate also called on the government to rein in those who steal government money, saying reports of mega scandals in government killed the morale of those who would like to pay their taxes willingly.
The Chairman of the Embu Jua Kali Association, David Munyi Njagi, told KRA that most of his members fail to pay due taxes because they needed to know which taxes were due or even how to compute their tax liabilities.
He pledged his association’s support in convening meetings where KRA can educate their member on matters.
He added that such meetings will also foster good relations between KRA and the Jua Kali operatives that rush to close their shops when word spreads that KRA inspectors are around.
