‘Kenyans are not being over-taxed’: Mudavadi
Prime Cabinet Secretary Musalia Mudavadi has stated that the taxation system in the nation is not excessively harsh.
Mudavadi emphasized that the actions taken by tax authorities are focused on stabilizing the government’s revenue collection in light of the economic challenges facing the country.
To improve the current situation, Mudavadi urged Kenyans to actively participate in revenue collection, asserting that the government is actively addressing and closing gaps that facilitate tax evasion.
“There is no country that grows and becomes economically stable without taxing its people. The government gets its revenue to undertake its functions only through borrowing, which leads to debts and taxes collected from its people. Even in developed countries nobody likes or enjoys paying tax. But that remains the rule of thumb for a country to sustain itself,” Mudavadi said.
Mudavadi emphasized the need for Kenyans to demonstrate patriotism, acknowledging that there may be temporary challenges but assuring that brighter times lie ahead.
He pointed out that no government takes pleasure in imposing heavy taxes on its citizens, explaining that once stability is achieved and the country returns to a path of economic growth, it will bring relief to those within the tax system.
“We are working hard as a government to seal the loopholes of tax evasion even as we look for other avenues on how we can generate revenue. What we are encouraging and working on is expanding the tax bracket and not increasing taxes. That is why we are looking for opportunities for creating more jobs so that many people can be enrolled in the tax payment quarter,” said Mudavadi.
Mudavadi highlighted that the government’s efforts to enhance the efficiency of domestic revenue collection will eventually contribute to stabilizing the current tax levels.
In his role as the Cabinet Secretary for Foreign and Diaspora Affairs, Mudavadi underscored the importance of the diaspora in bolstering the country’s economy.
He pointed out that the ongoing measures aim to strengthen ties with the diaspora, emphasizing the positive impact of the substantial remittances coming from Kenyan expatriates.
“What the country is collecting from Kenyans living abroad at the moment is almost surpassing our export targets. This is a key indicator that we need to have a stable foreign policy that will help us further our partnerships with other countries since we have seen this forms part of what helps us grow our country economically.” said Mudavadi.
During an interview with a local radio station, Mudavadi defended the government’s initiative to privatize certain state-owned companies and parastatals. He explained that under the recently enacted Privatization Bill of 2023, the government is authorized to privatize non-strategic state-owned enterprises that are performing well.
The returns generated from these privatizations, according to Mudavadi, will be utilized to enhance support in critical areas of the economy, including but not limited to infrastructure in transport, water, health, and education.
Mudavadi emphasized the importance of ensuring that all actions taken in this regard are in accordance with the law to prevent any uncertainties among the Kenyan public.
“What we want to encourage is proper management of these state-owned parastatals for them to generate revenue instead of government pumping in money day in day out to sustain them. Kenyans should take a leaf on what happened to KCB which was 100 per cent owned by the government some years ago and what happened at Kenya Posts and Telecommunications Corporation (KPTC) a government company that provided telecommunication and postal services across Kenya,” said Mudavadi.
Mudavadi pointed out that Safaricom, the foremost company in revenue remittances in the country, is a product of the privatization of Kenya Post and Telecommunications Corporation (KPTC).
He emphasized the necessity of considering the broader perspective of return on investment when evaluating the impact of privatization.
According to Mudavadi, Safaricom’s success highlights the positive outcomes that can result from privatization efforts, showcasing the potential for significant returns.
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‘Kenyans are not being over-taxed’: Mudavadi
