Every eligible entity must pay taxes, Ruto insists

President William Ruto has maintained that every eligible entity must pay taxes as he committed to domestic revenue mobilisation.

Speaking during the Tax Payers’ Day Awards at State House every eligible taxpayer must contribute their fair share to support development and services, with no one evading their duty or benefiting unfairly from others’ contributions.

The President commended “patriotic Kenyans” for performing their duty and filing eight million tax returns by June 30, 2024, surpassing the target by 26 per cent.

“Tax compliance is not only a legal and civic duty but also signifies our shared commitment to contribute towards national transformation,” he explained.

However, Ruto noted that Kenya’s current revenue collection is significantly below the East African Community target of 25 per cent of GDP.

“Our aim is to raise revenue from 14 per cent to 22 per cent of GDP within the next decade and to promote compliance from 70 per cent to 90 per cent by 2026-27," he said.

He added that expanding the tax base by addressing hard-to-tax sectors such as the informal economy and digital businesses will require collaboration, innovation and determination.

“The partnership between government and taxpayers must be based on a dynamic of reciprocity, with the government using effective policies and efficient public investments to enable taxpayers to thrive and create jobs and wealth,” he said.

He noted that the Tax Base Expansion Strategy enabled the government to generate Sh24.6 billion in the 2023-24 financial year and added 1.2 million new taxpayers to the national revenue base.

He said the strategy has succeeded in bringing landlords into the tax net through the Block Chain Management System and the Monthly Rental Income programme.

“Likewise, enhanced systems, including the Electronic Tax Invoice Management System have reduced VAT fraud, enabling us to mobilise Sh314 billion from over 280,663 VAT-registered taxpayers,” he pointed out.

“To sustain this progress and promote fairness, we must enhance equity and effectiveness of tax revenue mobilisation. This means that our tax measures must be fair, and every eligible entity must pay.”