Experts urge Kenya to widen tax base by targeting informal sector

Source: Xinhua| 2019-08-30 18:55:10|Editor: Wu Qin
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NAIROBI, Aug. 30 (Xinhua) -- Experts on Friday urged Kenya to widen the tax base by targeting the informal sector of the economy.

Philip Muema, chairperson of Institute of Certified Public Accountants of Kenya Center for Public Finance and Tax Board, told a tax forum in Nairobi that Kenya is unable to meet its revenues targets as a large proportion of its population is outside the tax net.

"The government is yet to come up with taxation structures that can capture incomes of those in the informal sector, which provides the bulk of the employment opportunities in the country," Muema said.

He observed that the country's online tax platform has so far captured approximately 5.7 million individuals out of the estimated population of 45 million.

He urged the government to leverage data from the mobile payment platforms to increase its tax revenues.

Muema said Kenya's tax revenues are mainly driven by income taxes and therefore efforts should be made to diversify sources of revenues and especially indirect taxes.

Thomas Kibua, director of academic affairs at Strathmore Institute for Public Policy and Governance, said that the government can increase its tax revenues through adequate provision of basic services to the public.

"If citizens can see where their tax revenues are going, they will be more likely to pay taxes and avoid tax evasion schemes," Kibua said.

The tax policy should also recognize the evolution of the economy, which is shifting from a heavy emphasis on agriculture to a service-based economy, he added.