The implementation of the far-reaching changes in consumption tax laws will mark the full implementation of the IMF-backed reforms that overhauled the VAT Act in 2023. AdvertisementThe IMF has for about a decade now been pushing reforms aimed at taxing all goods, with the vulnerable households to be cushioned through social protection programmes. The doubling of VAT on fuel to 16 percent in July, after multiple failed attempts in the past, is part of those reforms. The Treasury argues that the policy on zero-rating and exemption in the VAT tax system has over the years eroded government revenue, with collections underperforming potential by nearly 40 percent. Domestic VAT, however, accounted for 82.29 percent of the Ksh259.51 billion ($1.8 billion) revenue forgone by the Kenya Revenue Authority in 2021.

Source: Daily Nation September 14, 2023 16:43 UTC