PKF Kenya calls for consistent tax policy ahead of budget reading

NAIROBI, Kenya April 4-Regional audit firm PKF Kenya has called on the government to develop a consistent tax policy to ensure that all sectors know what to expect each year ahead of the budget reading slated for April 7.

According to Michael Mburugu, Regional Tax Partner PKF, the different tax policies implemented each financial year don’t provide much room for planning as each year there is something new.

“We should be looking a tax policy system that is certain, convenient and efficient and that enables taxpayers to pay taxes efficiently,” said Mburugu.

Kenya’s tax code has been termed complex and bulky by many stakeholders including manufacturer and SMEs, requiring firms to employ tax planners, tariff engineers, lawyers, and specific accountants to render professional advice.

This has seen most small-scale firms often comply, at great costs and loss of efficiency.

On other tax measures, the audit firm reviewed taxes on fertilisers, foodstuff, petroleum and liquified petroleum gas, and renewable energy amid the Ukraine-Russia war.

“To cushion farmers from high cost of fertilizer, the government should consider implementing a special relief on all taxes applicable on importation and sale of fertilizer in order to enhance food security,” said Mburugu.

Further, the audit firm warranted the rise in the debt to fluctuations in exchange rates and uptake of more domestic and external loans.

According to the Central Bank of Kenya, the gross public debt by the end of 2021 was high at Sh8.2 trillion from Sh7.2 trillion by end of 2020.

About half of the debt was external while domestic debt accounted for the other half.

“Most of our debt will need to be restructured,” Mburugu said.

He also noted that it being an election year, this is an opportune time where the country is in serious need of leaders who will take us to the next level.