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KRA to raise revenue from SMEs

The Kenya Revenue Authority is looking into ways of raising more taxes from the micro and small-scale enterprises (MSMEs) sector.

KRA’s acting commissioner for domestic taxes Mwangi Mugo speaking in Embu said the MSME sector contributes 35 to 45 per cent of GDP and up to 70 per of employment yet they only contribute six percent of domestic revenue.

“We are engaging them so that we see if we can raise their tax contribution to at least 20 per cent,” he said.

Mugo added that MSMEs held the greatest potential for revenue growth.

The Chairman of the Embu Branch of the Kenya National Chamber of Commerce and Industry Mugo Mate told KRA to consider giving new businesses tax holidays as a way of generating more tax payers.

He said new businesses are usually beset by enormous costs such as “premises goodwill,” customizing the premises to purpose and marketing which can easily kill the potential taxpayers.

He said even as they encourage their members to pay due taxes KRA should talk to those who prepare budgets at the Ministry of Finance so that they reduce the tax burden on individuals.

Mate also called on the government to rein in on those who pilfer government money saying reports of mega scandals in government killed the morale of those who would like to willingly pay their taxes.

The Chairman of the Embu Jua Kali Association David Munyi Njagi told KRA that most of his members fail to pay due taxes because they did not know which taxes were due or even how to compute their tax liabilities.

He pledged his association’s support in convening meetings where KRA can educate their member on matters.

He added that such meetings will also be used to foster good relations between KRA and the Jua Kali operatives that rush to close their shops, when word spreads that KRA inspectors are around.

By Steve Gatheru 


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