The Kenya Revenue Authority (KRA) Director-General Githii Mburu has warned Kenyans that there will be dire consequences if the excise tax increment proposed by the authority is not approved.
Speaking on Tuesday in an annual event to honour dutiful taxpayers, Mburu said that failure to approve the proposal would blow a hole in the state budget making it impossible to meet some of its development obligations.
“If we do not implement those two taxes it will affect our fiscal space, as a country it means the government will not be able to fund certain objectives it has set out to do. Kenyans must be alive to this fact that there are roads that we are not going to build, medicines, security and other services that we are not going to support,” Mburu said on the 17th launch of the Taxpayers’ Month.
The development comes just days after the High Court suspended the implementation of the 4.97 per cent excise rate proposed by the state.
Two petitioners went to court to stop the implementation of the proposed rate that has been roundly condemned as punitive and insensitive to the plight of Kenyans.
Those opposed to the implementation of the new rate hold the view that it will saddle Kenyans with economic burdens that they can scarcely bear.
They argue that the Covid-19 pandemic affected the economy negatively.
The government has been accused of seeking to finance its budget through punitive taxes instead of broadening the tax bracket by creating opportunities.
There are fears that the increase in excise duty on fuel will increase the cost of doing business and lead companies to reduce their workforce as a cost-cutting measure.
Top political leaders including Wiper leader Kalonzo Musyoka and ANC supremo Musalia Mudavadi have rallied against the new rate.
President Uhuru Kenyatta has not yet weighed in on the public outcry touched off by the increase in excise tax on fuel.