IMF Urges Kenyan Government to Revise Tax Reforms Amidst Public Scrutiny

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The International Monetary Fund (IMF) has intensified its engagement with the Kenyan government on tax reforms, urging President William Ruto’s administration to develop measures that are both socially and politically acceptable to taxpayers. This comes after the conclusion of the seventh and eighth reviews under the Extended Fund Facility and Extended Credit Facility.

Following the controversial repeal of the Finance Bill 2024, which sparked widespread backlash, the government plans to reinstate certain tax provisions and introduce new measures aimed at enhancing revenue collection. The IMF emphasized the need for a revenue-led fiscal adjustment strategy, advocating for a broader tax base and improved compliance alongside streamlined recurrent spending.

“We remain committed to our strategy through renewed efforts to widen the tax base and improve compliance,” the IMF stated. “Our engagement with a diverse group of stakeholders is crucial to ensure that proposed tax reforms are equitable and effective.”

The National Treasury is set to consolidate the proposed tax reforms into three new bills, which will be presented to Parliament for debate. However, the reception of these reforms remains uncertain. The previous Finance Bill faced significant criticism and was ultimately rejected, raising questions about whether the new proposals will garner public support.

As the government prepares to unveil the details of these reforms, Kenyans are left to ponder whether the measures will lead to greater fiscal stability or provoke further dissent. The political landscape remains charged, with many awaiting the upcoming parliamentary discussions on the new tax bills.

By Abel Kemboi

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