Details of the plan were outlined in a letter written to IMF by Treasury CS Ukur Yatani and the Central Bank of Kenya (CBK) Governor Patrick Njoroge.
Business and property owners were listed as the top target in KRA’s new plan to raise revenue for the new financial year 2021/22 with over 50 percent of the money being channelled towards the development budget.
Yatani and Njoroge said the plan, which will be rolled out by June 2021, will also come up with ways to curb revenue loss and tax cheats.
The Treasury, in March 2021, hinted at introducing a wealth tax prior to securing the Ksh 255 billion loan from the financial institution in April 2021 to fight the Covid-19 pandemic.
Treasury Principal Secretary Julius Muia added that the funds raised from the wealth tax will aid in the recovery of the economy.
“We are looking at fiscal changes that will go into the Finance Bill and we are in discussions over the wealth tax among many other fiscal reforms to boost revenue.
“It is too early to comment on how it will shape up as we are still discussing with stakeholders. We have a lot of issues that need to be cleared and procedures we have to follow before we implement it,” Muia said.
IMF outlined stringent demands and conditions for Kenya to secure the Ksh 255 billion loan. The loan, which was approved and will be disbursed to the government in three tranches, saw Kenyans raise concerns about the country’s debt. Over 200,000 Kenyans signed an online petition urging IMF to cancel the loan.
Kenya agreed to IMFs condition to enforce wealth declarations for all public servants in the quest to curb corruption. Another measure was ensuring all companies submit accurate, complete and updated beneficial ownership information to the Registrar of Companies.
IMF also wanted the restructuring of parastatals to cut down expenditure or ensure existing parastatals generate profit rather than run on losses.
The government is seeking to raise its debt ceiling past Ksh 9 trillion with the projected debt expected to hit Ksh 7.66 trillion from Ksh 6.69 trillion by June 30, the end of the financial year 2020/21.
The debt may hit Ksh 8.59 trillion in June 2022 and Ksh 9.37 trillion by mid-2023.