President William Ruto has defended the government’s plan to impose additional taxes on Kenyans, stating that it’s the only way to get the country out of debt.
"I am not going to preside over a bankrupt country, I am not going to preside over a country that is in debt distress. We have to cut our spending," Ruto said.
The President said he intends to raise the country’s average tax rate from 14 per cent to 16 per cent by the end of 2024 and aims for between 20 and 22 per cent by the end of his term in office.
"My drive is to push Kenya, this year we will be at 16 per cent. I want in my term, God willing, to leave it at between 20 and 22 per cent," Ruto said.
"It's going to be difficult, I have a lot of explaining to do, people will complain but I know they will appreciate. We have to begin to live within our means."
He spoke on Tuesday during an agreement with the Havard Business School students on Africa’s trade and investment potential.
Ruto’s remarks came barely a week after the introduction of the proposed Finance Bill 2024.
The Finance Bill, 2024 was published on May 9 and is set to be subjected to public participation thereafter.
The Bill contains tax proposals that the Kenya Kwanza government wants to use to raise revenue and finance its ambitious projects.
One of the proposals is the introduction of a Motor Vehicle Tax, with a rate of 2.5 per cent of the vehicle's value.
The minimum tax payable to the Commissioner on each vehicle at the time of issuance of insurance cover will be Sh5,000 with a maximum amount of Sh100,000.
The Bill states that the calculation would be based on make, model, engine capacity and year of manufacture.