This archive report was first published on 14 January 2020.
Kenya Revenue Authority (KRA) has reintroduced a three percent tax on sales for small traders, sparking concerns among entrepreneurs.
The tax, reintroduced through the Finance Act 2019, which President Uhuru Kenyatta signed into law on November 7, 2019, is expected to hurt enterprises struggling with low revenues.
According to Maurice Oray, the deputy commissioner for corporate policy at KRA, the tax is meant to enhance patriotism among citizens.
“Taxation is one way to enhance patriotism because people will always be responsible where they are spending and in this case, traders will stand with the government,” Oray said.
Oray added that the tax will provide KRA with a fresh avenue for raising taxes from small traders, who have largely been untaxed.
“The key thing is to recruit as many taxpayers as possible within that bracket, which has remained largely untaxed,” Oray said.
The informal sector, which accounts for 90.67 percent of new jobs created in 2018, is expected to be affected by the tax.
Kenya's economy expanded more slowly year-on-year in the third quarter of this year than in the same period in 2018, as activity proved lackluster in various sectors.
