On the face of it, the Kenya Revenue Authority (KRA) decision to demand that small traders pay the presumptive tax before the January renewal of their business permits, appears to be spot on.
This is because it offers the prospect of bringing the men and women in the informal sector into the tax net and ultimately help the taxman achieve his revenue targets.
But there is fear that the opposite may also be true. If the authority adopts a punitive approach to pursuing its goals, there is the likelihood that, in an economy where hard economic times are forcing businesses to shut down every day, most will disappear into the black market.
Instead of sending its menacing agents after the struggling traders, it may help if KRA made it easy for the traders to comply by setting up help desks in the counties.
This, in fact, should be the key message the taxman must pass during its campaign to sensitise traders on the new tax.
PAYE Tax Calculator
Note: The results are not exact but very close to the actual.
