- KIPPRA warns Kenya not to raise VAT above 16%, saying the current rate is already near the optimal revenue-maximizing level of 16.3%.
- A higher VAT could reduce economic activity, lower consumption, hurt compliance, and increase tax evasion.
- The report says raising the rate may bring diminishing returns rather than more revenue.
- KIPPRA recommends improving tax administration, broadening the tax base, and cutting unnecessary VAT exemptions instead.
- It also urges greater use of digital tax tools such as ETR, iTax, and eTIMS to boost compliance and revenue.
Source: peopledaily.digital
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
