William Ruto Insists His Govt Will Continue Taxing Kenyans To Get Country Out Of Debt Hole

• President William Ruto defended the introduction of a raft of taxes under the Finance Act 2023, arguing that taxes helped nations progress
• He explained that taxes were crucial in facilitating debt repayment, noting that he wouldn't allow the country to default on its obligations
• Beginning January 1, the last set of laws outlined in the Finance Act 2023 were implemented adding a financial burden to taxpayers

TUKO.co.ke journalist Japhet Ruto brings over eight years of experience in financial, business, and technology reporting, offering deep insights into Kenyan and global economic trends.

President William Ruto has emphasised that taxation is the only way to lift Kenya out of its debt burden and foster economic stability.

Ruto underscored the importance of generating revenue to fund essential government programmes and services despite stiff opposition from Kenyans who feel overtaxed.

Speaking during a burial ceremony in Njabini, Nyandarua county on Tuesday, January 2, the president defended the introduction of a raft of taxes under the Finance Act 2023, arguing that taxes helped nations progress.

He explained that taxes were crucial in facilitating debt repayment, noting that he wouldn't allow the country to default on its obligations.

"Many nations have been destroyed by debt, but there is no single nation that has been destroyed by taxes. In fact, many progressive countries have been built by taxes and that is where we need to go," he said.

Which taxes took effect in January?

Beginning January 1, the last set of laws outlined in the Finance Act 2023 were implemented.

One of the taxes effected on January 1 was the advance tax rate applicable to vans, pick-ups, trucks, prime movers, trailers, and lorries.

The tax saw an increase from the existing rate of KSh 1,500 per tonne of load capacity to KSh 2,500 or KSh 5,000 per annum, whichever is higher.

However, agricultural machinery will be exempted from the tax. Small cars, such as saloons, will also pay a monthly tax of KSh 160 per passenger or KSh 5,000 annually from the current KSh 2,400.

At the same time, the National Treasury plans to harmonise the rental income tax rate with the corporate income tax rate to facilitate compliance.

What is Kenya's debt?

As of September 2023, the national debt stood at KSh 10.58 trillion, surpassing the KSh 10 trillion threshold.

The gross public debt was composed of KSh 5.66 trillion (53.5%) in external debt and KSh 4.92 trillion (46.5%) in domestic debt.

The national debt increased by 22.57% compared to where it stood when Uhuru Kenyatta handed over the government to Ruto.