KEPSA had the honour of presenting a memorandum on the National Tax Policy, which is presently in its second draft, under the direction of the Public Finance Sector Board. This public engagement session was convened by the National Assembly Committee on Finance and National Planning and held at the EKA Hotel in Nairobi on October 12, 2023.

The KEPSA memorandum was predicated upon five topical areas outlined as follows:

1. Devising a public participation model that facilitates predictability in tax laws to attract investment. The proposed model seeks to incorporate a three-tier public participation framework. The initial tier involves the establishment of the Economic Affairs Committee within the National Treasury, comprising key private sector and government stakeholders. This committee is intended to ensure that economic and financial bills are formulated with the collective input of these stakeholders from the outset. The second tier entails the conventional public participation process, involving input from the broader Kenyan populace during the drafting of legislation. The third and final tier occurs subsequent to the bill's discussion in parliament, allowing for further refinements based on public validation. This innovative model aspires to engender transparency and consensus in the evolution of tax legislation.
2. Incorporation of a Tax Monitoring and Evaluation Committee in the policy, in which government research agencies would play a pivotal role. This committee's primary objective is to assess the impact of various tax legislations on diverse sectors of the economy before their periodic review.
3. In an effort to bolster compliance and incentivize the inclusion of micro and small enterprises within the tax framework, a proposal was tabled to harmonize the Turn Over Tax (TOT) and the VAT registration threshold. This harmonization aims to streamline the administration of tax for small and micro-enterprises, fostering simplicity and accessibility.
4. Institutionalization of taxpayer rights within the National Tax Policy. This endeavour aims to create a predictable environment in tax administration, addressing issues such as unannounced audits conducted by revenue authorities.
5. Furthermore, the National Tax Policy was observed to lack provisions for Environmental Social Governance (ESG) aspects. Accordingly, a proposal was advanced to incorporate tax incentives for taxpayers engaged in activities beneficial to society, such as initiatives focused on achieving net-zero carbon emissions, carbon neutrality, and the development and utilization of sustainable and environmentally friendly infrastructure.

For a comprehensive examination of the KEPSA memorandum, please refer to the detailed document accessible here.