KNCCI confident Treasury will budget gaps

BUDGET CASE 1 - KNCCI confident Treasury will budget gaps
The tax collector missed its target by Sh61 billion in the last financial year and the Treasury is now targeting to raise Sh2.115 trillion in total revenue. Photo/CFM-FILE.

NAIROBI, Kenya, Jun 17-The Kenya National Chamber of Commerce and Industry (KNCCI) has placed confidence in Treasury proposals to raise revenue in the 2019/2020 financial year.

KNCCI President Richard Ngatia said the Sh3 trillion budget revenue generation should be focused on the digital economy that carries a huge lot of tax evaders.

“Government should raise revenue on such through identifying non-compliant taxpayers, usage of technology to match taxpayer’s data through electronic filing, registration of more taxpayers on the iTax system, utilization of Data Warehousing and Business Intelligence, and passage of the Income Tax Bill will ease administrative bottlenecks, improve compliance and boost revenue collection,” he said.

While tabling the 2019/2020 budget the CS said tax evaders from various sectors will be added to Kenya Revenue Authority watch list to ensure the country generates enough revenue.

“To generate Sh37 billions of tax revenue, I propose to extend the tax base to enhance revenue through subjecting additional services such as hotels, sales and marketing, and the transporting sector as well,” said Rotich when he presented the budget estimates in Parliament last week.

He further said that the government will continue to fight illicit and counterfeit businesses as KRA further tightens its system.

The tax collector missed its target by Sh61 billion in the last financial year and the Treasury is now targeting to raise Sh2.115 trillion in total revenue.

The targeted revenue is Sh284.4 billion more than the Sh1.831 trillion income estimates for the last financial year.

Ordinary revenue streams for the Treasury include taxes and non-tax streams such as court fines, charges for use of government services, grants, rent of buildings and forfeitures projected to hit Sh1.877 trillion.

This means the Kenya Revenue Authority is expected to collect Sh225.7 billion more in the coming financial year.

In a statement, KNCCI President Richard Ngatia also said an increase in revenue generation will boost the Small and Medium Enterprises.

“Being a leading voice of the business community more specifically for the SME sector in the country, we welcome the Sh367.34 billion allocated to the Big 4 Agenda,” the Chamber President said.

The Chamber has considered the budgetary allocations as providing the incentive to SMEs to come up with innovative entrepreneurial business models in these sectors.

One of the major challenges facing SME’s in Kenya includes lack of inadequate access to credit.

“In our latest policy brief dubbed “Improving access to credit in Kenya”, we took up the issue of inaccessibility to credit and made recommendations to the government to come up with a “Biashara Fund” that would finance and support the needs of SMEs in the country,” said the newly elected KNCCI Chair.

He further urged the government to remove the interest rate cap that has affected SME’s denying them the opportunity of accessing credit to boost their business.

“Most importantly, our recommendations that the interest rate cap has had adverse effects on accessibility of credit by SMEs has been captured well through the recommendation that the cap is going to be lifted,” he said.

According to the KNCCI, the move to revive the textiles sector by making budgetary allocation for RIVATEX will create employment to 3000 Kenyans.

The Kenya Revenue Authority appears likely to miss the target set for the new financial year where tax collections for the past ten months till April stood at Sh1.16 trillion.

Some of the hitches experienced in revenue collection targets often increase the country’s budget deficit that is bridged through increased borrowing to meet money demands for public service delivery and development projects.

Author: worldwidenewscast

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