The discussion in Kenya revolves around managing expenses at critical infrastructure like airports while considering tax adjustments. The finance minister proposes reducing value-added tax (VAT) and corporate taxes as part of this strategy.
With Kenya facing debt challenges, there is a need to generate more revenue. However, reducing taxes could impact revenue collection and worsen budget deficits.
Efforts to enhance tax compliance are crucial, as Kenya falls short of its revenue targets. The proposed tax cuts are expected to encourage compliance in the long run.
While tax reductions may benefit citizens by freeing up disposable income, there are concerns about the sustainability of this approach in the future.
In addition to tax cuts, Kenya plans to introduce an eco-levy to boost revenue through increased taxes on certain products. However, the long-term viability of these measures remains uncertain.