President William Ruto’s economic advisor, Moses Kuria has called for a national conversation on the issue to address potential inequalities in tax distribution and economic contributions.
In a statement on Thursday, September 12, Kuria said one of the best wins from the Gen Z anti-finance bill protests is the culture of ordinary people, especially the youth coming out to talk about national issues devoid of ethnic tags.
Kuria said the country should discuss the disparities in taxation between Kenyans in the formal sector and those in the informal sector.
He claimed that Kenyans employed in the informal sector contribute less to taxation compared to those in formal jobs despite being the majority.
“There is an Income Tax Discussion we need to have. We have 3 million people with formal jobs. They contribute Ksh 500 billion shillings in income taxes annually,” Kuria said.
“We have 16 million people working in the informal sector. They contribute Ksh 10 billion in income taxes. This is one issue that should be debated.”
Statistics of Kenyans in the Formal and Informal Sector
According to the Kenya Revenue Authority’s database in 2022, 3.2 million people were employed in the formal sector which is 16.7% of the country’s labor force.
This was compared to the 15.9 million people employed in the informal sector in the same year.
In the same year, KRA reported that the formal sector employees contributed around Ksh 1.8 trillion in taxes while those in the informal sector contributed an income tax of Ksh 3.1 billion.
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During that year, the largest number of people in the informal sector were in wholesale and retail trade, as well as hotels and restaurants, with 9.32 million people employed in the hospitality sector.
Moreover, the hospitality sector in the country was the fastest-growing economic sector with a quarterly growth rate of 21.5 percent of the GDP.
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However, the largest economic sector in terms of addition to the GDP was the agricultural industry.
In that year it was reported that a total of 19.1 million people were employed in the country, an increase of over 815, 000 individuals from the previous year.
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Wilfred Nyangaresi | Nation Media Group
