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Budget focused on revenue rise, not the poor - experts

CASH
The latest budget is focused on increasing revenue generation. FILE PHOTO | NMG 

Analysts at Ernst & Young (EY) have said the latest budget was more focused on increasing revenue generation rather than reducing the tax burden on the ordinary Kenyans.

Amongst the measures set to raise revenue is the Robin Hood tax levied on high value money transfer at a rate of 0.05 per cent, and increased excise duty of 12 per cent (previous 10 per cent) on mobile to mobile phone payments.

“In the latter case, the question is whether the providers will pass these increased costs onto the consumer in the form of heightened consumer transaction fees,” said Catherine Mbogo, EY partner, tax services.

Further, in an effort to capture revenues from the informal economy, the Treasury will introduce a presumptive tax of 15 per cent.

It is anticipated that this tax regime will be more effective than its predecessor (turnover tax) but it all depends on its administration.

And the government in an effort to enhance tax compliance amongst tax payers, has proposed to increase late payment of tax interest to two per cent per month from one per cent and imposed a 20 per cent late payment penalty.

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