IMF issues new tax proposals after approving Ksh142.8 billion loan for Kenya
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The International Monetary Fund (IMF) proposes new tax measures to the government after approving a loan facility of Ksh142.8 billion
The International Monetary Fund (IMF) proposes new tax measures to the government after approving a loan facility of Ksh142.8 billion.
The international financial organization recommended President William Ruto to implement changes to increase the tax base so that the country can collect more domestic taxes in a statement dated Thursday.
IMF also called on the Ruto administration to ensure that there is tax compliance.
The global financial institution clarified that the action will assist the government in raising funds to pay down its debt.
“A tighter fiscal stance is envisaged under the program to help reduce debt vulnerabilities and achieve a PV debt/GDP of 55 per cent, the authorities’ debt anchor, by 2029.
“This will entail the timely implementation of reforms to broaden the domestic tax base and improve tax compliance. These are critical for achieving the authorities’ revenue objectives of reversing the trajectory of the tax revenue-to-GDP ratio while promoting equity and fairness in the tax regime,” read the statement in part.
Additionally, the global financial body also pushed for the government to carry out reforms in state corporations and enhance the efficiency of public investments.
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Ruto’s administration was also called to hasten the digital delivery of public services which is currently being done on the e-Citizen platform.
IMF also pushed for better implementation of subsidies, which the institution has lobbied for since President William Ruto’s inauguration in September 2022.
Notably, Ruto removed the subsidies on fuel and maize that were put in place by President Uhuru Kenyatta to cushion Kenyans from the high cost of living.
Following the removal of the subsidies, the cost of fuel surpassed the Ksh200 mark.
According to President Ruto, the subsidy programmes were often misused and only benefited a few Kenyans and companies.
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