How Increased Taxes in Finance Bill Hold Key to Ruto Receiving Ksh575 Billion IMF Loan
Foreign Affairs Principal Secretary (PS) Korir Sing’oei revealed on Sunday that the proposed tax measures in the Finance Bill 2024 are crucial for the International Monetary Fund (IMF) to release a Ksh575 billion loan to Kenya.
PS Korir, speaking during a press briefing on President William Ruto’s state visit to the US, addressed the delay in the IMF’s loan review.
The PS expressed optimism about concluding the 7th Review, noting that much depends on Kenya’s success in revenue collection.
This requirement aligns with the World Bank and IMF’s condition that Kenya must regularly demonstrate its capacity to meet international debt obligations through its own revenue sources.
Korir explained the link between raising taxes and accessing the IMF loan, stating, “We have a comprehensive program ongoing with the IMF, and our discussions currently focus on tax measures, particularly those proposed by the government to increase revenue.”
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Although the Finance Bill outlines areas for tax increases, these proposals could still be rejected by Parliament.
This potential rejection might explain why the IMF is hesitant to release the loan until the Bill is signed into law by the President.
PS Korir mentioned that the Finance Bill is undergoing parliamentary processes and highlighted the complexities surrounding tax revenue issues, contributing to the prolonged consensus between Kenya and the IMF.
He also expressed regret that African countries, including Kenya, face stringent conditions when accessing loans from foreign markets.
It was announced that this issue would be raised by President Ruto during his meeting with US President Joe Biden on Thursday, May 23.
The Foreign Affairs PS emphasized the need for a fundamental change in the terms and conditions under which Africa accesses credit.
Initially, the IMF attributed the review’s delay to the flood crisis affecting the country.
How Increased Taxes in Finance Bill Hold Key to Ruto Receiving Ksh575 Billion IMF Loan