President William Ruto has pledged to introduce wealth tax on Kenyan tycoons in accordance to their wealth capacity.
This is among the president’s efforts to ensure the wealthy pay relative taxes to help fund the national budget and reduce reliance on loans.This sort of tax would be based on a person’s net worth after deducting their liabilities and would only apply to the richest citizens.
President William Ruto endorsed the wealth tax introduction as he revived the proposal to impose higher taxes on Kenya’s high-income earners, that failed to sail through Parliament over the past four years.
This would apply to all property such as real estate, cash, investments, business ownership and other assets, less any debts, and investors would owe the tax each year based on the market value of the assets.
“The economic principles of equitable taxation require that the tax burden reflects ability to pay. This is best achieved by a hierarchy that taxes wealth, consumption, income and trade in that order of preference. Our tax regime currently falls far short of this.We are over-taxing trade and under-taxing wealth. We will be proposing tax measures that begin to move us in the right direction,” Dr Ruto said.
This means the government will impose higher taxes on the rich, followed by excise taxes on consumption of items like beer, cigarettes and betting before targeting workers’ income tax and lastly traders for corporate and sales taxes.