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Kenya Plans to Triple Annual Tax Revenue in Five Years

© AP Photo / Andrew HarnikKenyan President William Ruto during the U.S.-Africa Leaders Summit in Washington, Thursday, Dec. 15, 2022.
Kenyan President William Ruto during the U.S.-Africa Leaders Summit in Washington, Thursday, Dec. 15, 2022. - Sputnik International, 1920, 18.12.2022
The African country’s fiscal policy was made amid its cooperation with the International Monetary Fund (IMF), which provides financial aid to developing countries in exchange for them implementing a number of policies. These policies usually include an increase in budget revenues and the elimination of subsidies.
Kenya intends to almost triple annual tax collection to $40.6 billion in five years, its President William Ruto said in an interview at the US-Africa Leaders Summit in Washington.
The president's statement comes as his country spends more than half of its tax revenue on debt payments.
“I am very confident that our debt situation is going to change significantly because we have begun to make the right decisions,” he pointed out.
Meanwhile, Kenyan officials announced plans last month to cut "non-priority expenditures," as well as to reduce borrowing in order to reduce the fiscal deficit.
In addition to the cost of paying off debts, combating the consequences of drought is another serious item of Kenya's budget expenditures. Kenya, along with other countries of East Africa, is currently facing severe water and food shortages due to one of the harshest droughts that the region has suffered in four decades.
In late November, Kenyans who serve in the country's defense forces offered to forgo one day of their pay every month in order to contribute to the drought relief fund. Additionally, the country's government has already called on people from Kenya's "food surplus counties" to contribute a share of their earnings to help the drought-affected areas.
Fiscal policy changes in Kenya come in light of a new financing agreement between the African country and the IMF on November 8. The international lender based in Washington is known for demanding that beneficiaries of its financial aid line up their government finances with neoliberal free-market practices, such as eliminating subsidies and regulations and reducing government's spending.
Supporters of Kenyan Deputy President William Ruto push a wheelbarrow, a symbol used by the United Democratic Alliance (UDA) party, as they celebrate at his party headquarters in Nairobi, Kenya, Monday, Aug. 15, 2022. - Sputnik International, 1920, 15.09.2022
IMF Forces Kenya to End Fuel Subsidies, Driving Prices Up as ‘Hustler’ Champion Ruto Takes Office
In September, Kenya’s government, following the IMF requirement from July 2022, ended fuel subsidies that had protected Kenyans from worldwide price hikes.
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