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HomeWealthIMF Backs Kenya’s Decision To Raise Cooking Gas, Bank Loans Tax

IMF Backs Kenya’s Decision To Raise Cooking Gas, Bank Loans Tax

The International Monetary Fund (IMF) has supported Kenya’s decision to tax cooking gas and bank loan fees.

IMF argued that taxing the essential good and service has helped the country to raise additional cash resulting to price reduction for fuel and fertiliser.

IMF Mission Chief to Kenya Mary Goodman further noted that the new taxation has bore fruit saying its latest review of the economy have resulted in strong tax collections.

“Kenya’s fiscal position has been underpinned by strong tax revenue performance this year, buoyed by a robust economic recovery and the important tax policy measures already undertaken as part of multi-year plan to reduce debt-related vulnerabilities,” Goodman said.

The taxation measures include 16 percent levy on cooking gas and raising of excise duty on airtime and data to 20 percent from 15 percent.

It also include introduction of a 20 percent duty on fees and commissions earned on loans as well as a 7.5 percent tax on winnings from gambling.

Following the success of the program, the Treasury allocated KSh 5.7 billion fertiliser subsidy to small-scale farmers ahead of the planting season.

A further KSh 1.5 billion was budgeted for the October-December short-rainfall period.

On the other hand, the Treasury released KSh 49.164 billion under pump prices stabilisation scheme to reduce the price of the essential commodity.