Kenya: Small Traders Face Higher Taxes as KRA Moves to Tax Every Single Product

Nairobi — Small businesses are set to pay more in taxes as the Kenya Revenue Authority (KRA) moves to tax every single product.

The move will hurt small and medium-sized enterprises (SMEs), which usually import goods in consolidated forms, cutting the high cost of importation.

Through this, KRA will open containers and calculate taxes for every product on consolidated form.

Ordinarily, consolidators charge Sh896 for a kilo of cargo transported by air and Sh640 by sea.

Last year, the Government sought to expand tax collection by taxing every Kenyan with an ID card.

President William Ruto said every Kenyan above the age of 18 should be issued the Kenya Revenue Authority's (KRA's) pin, qualifying them as taxpayers.

Expansion of the tax base is part of the President's administration's target to raise Sh3 trillion by the end of the financial year ending June 30, 2023.

"Every Kenyan with an ID should have a PIN number. Technology, and a considerate, fair and professional mobilisation will do the job quite well," Ruto said earlier.

To achieve this, the President challenged KRA to build on Safaricom's M-Pesa success.

"There are only 7 million people with KRA pin numbers. At the same time, in the same economy, Safaricom's MPESA has 30 million registered customers, transacting billions daily," he said.

"The fact that this opportunity remains unclear to KRA demonstrates why radical changes are necessary. Safaricom, a telco, has registered more people than KRA, a powerful state organisation. It is very clear that the magic lies in technology and strategy, not power and resources," he added.

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