The acting Inspector General of Police Noor Gabow on Monday, November 7, 2022, directed a country-wide police crackdown on all illegal and contraband goods.
In a statement on social media, the acting police boss further directed all commanders to liaise with the Kenya Revenue Authority (KRA) officials to crack down on other forms of tax evasion schemes.
Through the National Police Service, the crackdown is meant to curb tax evasion.
“The Acting Inspector General of Police Mr Noor Y. Gabow has today directed a country-wide police crackdown on all illegal and contraband goods including other forms of tax evasion schemes.
“This follows the detection of numerous tax evasion schemes around the country which deny the government due revenue to fund public services. The crackdown is to commence with immediate effect under the coordination of respective commanders at all levels,” part of the statement read.
PHOTO/Twitter
Tax revenue target
This comes as the National Treasury anticipates collecting more revenues this financial year than it did last year.
According to a report by the Parliamentary Budget Office (PBO), the National Treasury projects that the revenue collections for this financial year (2022/2023) will increase to Ksh2.462 trillion up from Ksh2.031 trillion collected last financial year.
In its report dubbed Budget Watch for 2022/2023 and the Medium Term, the PBO said of the Ksh2.46 trillion projected revenue, Ksh2.1 trillion will come from ordinary revenue, while Ksh321 billion will come from Appropriations-in-Aid (AIA) – income that a government department is authorised to retain rather than surrender to the Consolidated Fund.
Income tax is expected to contribute Ksh997 billion to ordinary revenue while Ksh585 billion will come from Value Added Tax collection (VAT).
Widening tax bracket
The report by PBO comes at a time when President William Ruto has defended his call for the public to pay taxes as the government moves to ramp up revenue collection in its race to meet a Ksh6 trillion collection target by 2027.
He promised to widen the tax bracket and ensure everyone pays their taxes and has directed Kenya Revenue Authority to embark on reforms that will see everyone aged 18 years and above roped into the tax bracket.
“We need to pay taxes so that we can get resources for development projects and also be able to repay the debt that we have as a country,” Ruto said.
Adding;
“We intend to cut on borrowing but we must increase the revenue we collect to be able to undertake development.”
The President said he intends to emulate Kenya’s third president, the late Mwai Kibaki, who managed to increase tax revenue fourfold, from Ksh250 million to Ksh1 trillion annually.
At present, the taxman collects about Ksh1.88 trillion in taxes annually, slightly above half of what the Treasury budgets for expenditure every year.
For every Ksh100 the government collects, about Ksh60 is spent on debt repayment. Much of the rest is spent on recurrent expenditure, such as salaries for State and Public officers.
Raising tax revenue is expected to give the government more legroom to engage in development investments while reducing reliance on foreign debt.
The country is currently grappling with a high inflation rate due to high food and energy prices. It also comes amid internal challenges that include the weakening of the Kenya shilling against the dollar and drought in some parts of the country, coupled with the effects of the Russia-Ukraine war on global economies.
