Small businesses are bracing themselves for tougher times as the Kenya Revenue Authority (KRA) moves to effect a 15% presumptive tax on business permit fees this month, a move that is likely to further strain the traders who have already been operating under tough economic conditions.
KRA is seeking to raise at least Ksh5 billion from informal traders such as barber shops and fresh produce vendors.
The move by the taxman is aimed at ensuring that it meets its targets at a time when the government needs money to finance the Big Four Agenda as well as various developmental projects.
KRA is targeting at least 3 million traders in order for it to raise the Ksh5 billion.
Consequently, consumers of goods and services offered by the small businesses are the most likely to be affected by the new tax as the traders are likely to transfer the additional cost to them.
Experts opine that the tax is ill informed given that the traders had not anticipated the extra burden when they were starting the businesses.
On October 16, 2018, President Uhuru Kenyatta lamented that both levels of governments have failed Small and Medium Enterprises (SMEs) by failing to create an enabling environment for the businesses to thrive.
READ: GOVERNMENT CHANGES TAX COLLECTION TACT, GOES AFTER TYCOONS LIVING LARGE
Addressing business owners during a conference at the Strathmore Business School in Nairobi, President Kenyatta rubbished his official speech saying that the government had failed SMEs.
“I will not read my speech because we have failed our people so it’s only fair we come here and be ashamed for our shortcomings,” said President Kenyatta.
On December 11, the President while addressing bankers during the launch of the new generation coins at the Central Bank of Kenya (CBK) also expressed his concern over lack of credit to SMEs.
SEE ALSO: LACK OF CREDIT TO SMEs PAINS UHURU
“I ask you, as the owners of credit it is time that you start changing how you look at how you deal with credit. We have a lot of young and innovative people. They may not have tittle deeds but they have great ideas. We can take on jointly the responsibility of training them on how to manage their accounts and how to manage their finances but at the end of the day that is of no use if they cannot access credit,” said President Kenyatta.
2 Comments