This archive report was first published on 14 November 2019.
Kenya is plagued by free riders who benefit without contributing to the country's development, resulting in a significant loss of revenue due to tax evasion.
According to recent National Treasury statistics, tax evasion has increased the budget deficit by 6.2 per cent, up from 5.9 per cent in 2018, resulting in a deficit of close to Sh500 billion a year.
The government plans to strengthen the Kenya Revenue Authority (KRA) to combat tax evasion and has set a three-month cap on resolving pending tax disputes.
Instead of allowing people to wait until the court ruling is out before they pay, the government will allow money owed to be collected immediately, and only when courts make rulings, will Kenyans claim funds owed to them.
The State should let tax cheats carry their burden, and cases must not drag in court.
However, this is not the only solution to the problem, and the State is working to strengthen the existing tax collection framework and the KRA.
Alternative arbitration methods are being encouraged, and a deep understanding of human psychology has played a role in the development of this plan, which aims to provide incentives for those who have evaded taxes in the past to come clean.
As the government seeks to nip tax evasion in the bud, it is essential to strike a balance between collecting revenue and not criminalising people.
