The Institute of Certified Public Accountants of Kenya (ICPAK) wants the government to fast-track the enactment of the new Income Tax Bill 2018.
The National Treasury has been in the process of reviewing the Income Tax Act (ITA) with the aim of simplifying compliance and aligning it to international best practices and in line with Government’s Big Four Agenda to enhance the growth of the economy.
The enactment of the Bill should be anchored by clear policy proposals and should put in place fiscal policy frameworks.
Speaking to the press on Tuesday in Nairobi on the fiscal budget of 2018/19, ICPAK Chairman Julius Mwatu said while the income tax is going to be the primary driver of this year’s budget, the government should further put in place fiscal policy frameworks that prioritize development expenditures to support growth, whilst curtailing growth of nonproductive recurrent expenditure.
Treasury Cabinet Secretary Henry Rotich last week presented a budget of Sh 3.07 Trillion from Sh 2.77 Trillion the previous year.
The budget also projects to raise Sh. 1, 942.2 billion as total revenue.
Mwatu said the current budget is historic, but cautioned that even as the government prepares to implement it, there is need to take into consideration tax measures, macro-economic environment, devolution and the big four agenda.
The Chairman noted that the change in the VAT regime on commodities like LPG, bread, sugar, maize flour, bottled water and processed fish which have been shifted from zero rating to VAT exempt is bound to make them more expensive.
Moving these basic commodities to exempt status implies that manufacturers cannot claim input VAT which is then passed to the final consumer through the commodity prices, he added saying citizens, most of who still live below a dollar a day cannot afford.
Any trigger, he emphasized, that increases the cost of these commodities adds to the high cost of living experienced already, and thus advised the government to reconsider this decision with a view to making the burden of the citizens lighter.
Mwatu suggested that the government also takes advantage of the mobile money transfer and other digital financial platforms that have already penetrated the remote parts of the country and benefits both the low-income earners as well as high earners.
We believe that other than imposing further taxes on basic commodities, the government can explore other innovative ways of raising revenues to fund the projects and programs that would improve food security, whilst cushioning the low-income households against the brunt of increase in prices of other basic commodities, he noted
ICPAK also wants the government to deal decisively with corruption in the country, saying the vice has diverted public resources for personal interest.
According to Mwatu, Corrupt officials should face the full force of the law and be barred from holding public office.
He said the Institute is ready and willing to work closely with the government in vetting professionals in the public sector.
While we support the current directive by the President for a mandatory lifestyle audit for all state and public officers, we implore that the process be undertaken in a manner that is objective and respects the rules of national justice, Mwatu reiterated.
On devolution, Mwatu said the two levels of government should continuously cooperate, especially in the areas of capacity building for its success, noting that crucial frameworks such as policy on own source revenue should be complemented and implemented.
He however noted that County governments have been hampered by pending bills, underperformance in revenue collection, lack of capacity to evaluate the county plans as well as link in public participation.
Development funding to crucial sectors such as agriculture and health has also been minimal and these sectors being devolved functions, require massive resources to actualize, he said
Despite the challenges, Mwatu noted the stable microeconomic environment in the country, which he said has provided a platform to anchor this year’s budget.
ICPAK has commended the Government for coming up with an elaborate economic development blueprint that will create jobs, reduce poverty and distribute wealth among all citizens.
Source: Kenya News Agency