On 10 October 2012 it was reported that, according to Kenya’s Finance Minister, the government needs to find KES40bn of additional tax revenue or spending cuts to fill a hole in its 2012/13 Budget, which has been largely caused by the recent pay raises for teachers and health workers.
In its policies to cover that shortfall, the government has chosen to introduce new tax measures, and has tried to avoid those that would have a negative effect on the Kenyan economy.
The most eye-catching of the new tax proposals is a 10% excise duty on the fees charged by service providers on money transfers by way of mobile phones, to raise some KES4.5bn.
In addition, a capital gains tax will be charged on asset or share sales in the oil and mining sectors, while the Finance Ministry also plans to improve tax compliance in the country.
