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Experts urge Kenya to widen tax base by targeting informal sector

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Philip Muema, Chairperson of Institute of Certified Public Accountants of Kenya Centre for Public Finance and Tax Board made the plea.

Muema told a tax forum in Nairobi that Kenya is unable to meet its revenues targets because a large proportion of its population is outside the tax net.

“The government is yet to come up with taxation structures that can capture incomes of those in the informal sector.

“The informal sector provides the bulk of the employment opportunities in the country,’’ Muema said.

He observed that the country’s online tax platform has so far captured approximately 5.7 million individuals out of the estimated population of 45 million.

Muema urged the government to leverage data from the mobile payment platforms to increase its tax revenues.

He said Kenya’s tax revenues are mainly driven by income taxes and, therefore, efforts should be made to diversify sources of revenues and especially indirect taxes.

Thomas Kibua, Director of Academic Affairs at the Strathmore Institute for Public Policy and Governance, said that the government can increase its tax revenues through adequate provision of basic services to the public.

“If citizens can see where their tax revenues are going, they will be more likely to pay taxes and avoid tax evasion schemes,’’ Kibua said.

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