Mudavadi Defends Government’s Tax Regime

Mudavadi Defends Government’s Tax Regime

Mudavadi Defends Government’s Tax Regime

Musalia Mudavadi, the Prime Cabinet Secretary, has stated that the nation’s tax  system is not punitive.

According to Mudavadi, the taxman’s actions  are intended to stabilize government  revenue collection parameters in light of the  nation’s current economic hardship.

Mudavadi stated that Kenyans must accept the collection of their own money in  order for the nation to escape its current predicament, and he added that the  government is attempting to close tax evasion loopholes.

“There is no country that grows and becomes economically stable without taxing its people. The government gets its revenue to undertake its functions only through borrowing, which leads to debts and taxes collected from its people. Even in developed countries nobody likes or enjoys paying tax. But that remains the rule of thumb for a country to sustain itself,” Mudavadi said.

Mudavadi said it is time for Kenyans to be patriotic, noting that pain might be experienced now but there is light at the end of the tunnel.

He stated that no regime is happy to overburden its citizens with tax, saying once things stabilize and get back on the economic growth path, it will be a relief for  Kenyans within the tax regime.

“We are working hard as a government to seal the loopholes of tax evasion even as we look for other avenues on how we can generate revenue. What we are encouraging and working on is expanding the tax bracket and not increasing taxes. That is why we are looking for opportunities for creating more jobs so that many people can be enrolled in the tax payment quarter,” said Mudavadi.

According to Mudavadi, measures being put in place by the government in streamlining domestic revenue collection will in the long run help in stabilising the tax levels being experienced.

Mudavadi who is also the Foreign and Diaspora Affairs the Cabinet Secretary noted that Kenya is strengthening its diaspora as a key pillar in building the country’s economy citing that the current remittance from the Kenyan Diaspora is very encouraging.

“What the country is collecting from Kenyans living abroad at the moment is almost surpassing our export targets. This is a key indicator that we need to have a stable foreign policy that will help us further our partnerships with other countries since we have seen this forms part of what helps us grow our country economically.” said Mudavadi.

In an interview with a local radio station, Mudavadi backed the government’s  proposal to privatize a portion of state-owned businesses and parastatals.

He said that the government can privatize non-strategic performing state-owned businesses whose returns will help add value to cater for support in other  important areas of the economy, such as but not limited to infrastructure in  transport,  water, health, and education, under the now-law Privatization Bill, 2023.

Mudavadi asserts that in order to prevent raising  any questions in the minds of  Kenyans, every action that is performed must be  grounded in the law.

Instead of the government providing financial support, we aim to promote the  appropriate administration of these state-owned parastatals so they can create income.

“Instead of the government always providing funding to support these state-owned parastatals, we want to promote good management of them so they can  create income.

Kenyans ought to learn from the experiences of KCB, which the government once  owned in its entirety, and Kenya Posts and Telecommunications Corporation  (KPTC), a government-run business that offered postal and telecommunication services throughout the  country, stated Mudavadi.

Mudavadi claims that privatization at KPTC led to the creation of Safaricom, the  nation’s top revenue remittance provider, noting the necessity to consider return on  investment in a broader context.

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