Accountants are pushing the government to explore alternative options to plug the deficit left if levying of the unpopular value added tax (VAT) of 16 per cent on petroleum products is stopped.
The Institute of Certified Public Accountants of Kenya (ICPAK) Wednesday said the government should instead step up the fight against graft and cut down on unnecessary expenditure.
ICPAK also urged Kenya Revenue Authority (KRA) to increase efficiency in tax collection by modernising the system of financial management and taxation regime.
The institute added there was need to intensify trade promotion through fairs for local and international products, marketing and financial assistance, which will result in increased exports.
“We therefore ask the President to assent to the Finance Amendment Bill 2018. This will undoubtedly ease the pressure on the citizens and allow players an opportunity to explore other revenue raising mechanisms and fiscal accountability measures,” said ICPAK chairman Julius Mwatu.
“Strict measures should be taken to seal corruption avenues and recover these monies to fund the budget for development,” ICPAK said.
This comes against a backdrop of a raging debate occasioned by implementation of the tax. The levy was introduced by the VAT Act, 2013.
Considering the adverse effects it could have on the citizens, the VAT Act 2013 exempted petroleum products from VAT for a period of three years.
This exemption was further extended for an additional two years through the Finance Act 2016, effective September 1, 2016 which lapsed on September 1.