In 2013, the Value Added Tax (VAT) Act passed by parliament increased the number of taxable goods – by reducing the number of exempt and zero rated goods. The government hopes to raise an additional Sh. 10 billion per month in doing so. The standard rate of VAT remains 16%.

In theory, this is what we should aim for. VAT has several advantages: it covers both goods and services. It is also less risky when it comes to revenue leakage. VAT is self-enforcing – it uses an invoice-based credit mechanism in its administration, which facilitates collection and enforcement; even if … Read More