This archive report was first published on 18 June 2020.
On June 18, 2020, the Treasury Secretary faced the toughest test in over a decade, as the country struggled to recover from the economic disruption caused by the 2007 General Election and the COVID-19 pandemic.
The pandemic had just emerged globally when the Treasury Secretary took office, but there were precursors to his ascendancy, including the economic disruption caused by the disputed presidential election and falling commodity prices.
Revenue collection had been sluggish, and the budget deficit remained wide, making it difficult for the Treasury to implement effective tax measures.
However, one tax measure stood out as particularly egregious: the new VAT regulations, which required procuring entities to validate suppliers for VAT compliance.
This effectively turned buyers into forensic auditors, a role that was not only uncalled-for but also added another layer of problems for businesses already struggling to access working capital.
As a result, businesses had to borrow money to cover their expenses, making Kenya an expensive investment destination.
It is imperative that the government scraps or amends this law before it is passed into law, to avoid further hindering economic growth and investment in the country.
