Ruto Highlights Tax Imbalance Among MSMEs as KRA Seeks Higher Remittances

President William Ruto has raised concerns over the significant mismatch in tax remittances from Micro, Small, and Medium Enterprises (MSMEs), urging alignment to expand the tax base

Speaking at the Taxpayers’ Dinner at State House, Nairobi, on Wednesday, President Ruto noted that while MSMEs contribute 33% of Kenya’s GDP and employ nearly 15 million people accounting for 86% of the national workforce they only generate 1% of tax revenue

He emphasized that paying taxes should go beyond legal obligation, framing it as “an act of patriotism and solidarity” crucial for nation-building

“It is a collective effort that calls for participation, contribution, and shared responsibility,” Ruto said

To address the gap, the Kenya Revenue Authority (KRA) has launched the Micro & Small Taxpayers Department, dedicated to individuals and MSMEs

This new unit aims to serve the 1.2 million MSMEs currently in the tax base while facilitating the onboarding of over 5 million more

Services include simplified processes, personalized support, and a fairer, more accessible tax experience

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Ruto further highlighted the disparity in contributions: 3 million formally employed Kenyans pay Ksh.600 billion annually, whereas the remaining 17 million registered taxpayers contribute only Ksh.17 billion

KRA has also implemented an electronic rental income tax system targeting Ksh.80 billion annually, up from Ksh.14 billion

President Ruto concluded that Kenya’s development hinges on tax compliance. KRA reports that tax collections have surpassed Ksh.2.57 trillion, with a target of Ksh.3 trillion for this financial year

Writer : Mweru Mbugua