Ruto’s Administration Promises to Tax the Rich to Raise Funds

13th Parliament of Kenya

The new government of Dr William Ruto is facing unprecedented problems from high inflation to huge debts and budget deficits. President Ruto has now proposed a new strategy to raise more revenue to fund the budget.

Speaking to the 13th Parliament during its inauguration, the President said that his government was reviving a proposal to impose more taxes on rich people and high-income earners.

This type of taxation is known as progressive taxation whereby high-income earners are taxed more proportionately than low income earners.

In his inaugural speech after being elected in August, President William Ruto said that his government will spend much of its first year in office to pay off debts.

Ruto’s policy is to reduce external debts and government spending on development projects, and focus on internal borrowing and supporting small businesses.

One of the ways that the government aims to raise the required funds is to tax the super-rich.

This will also reduce the burden on low income earners, including SMEs and workers.

As opposed to other kinds of taxes such as income tax, people with sufficient networth would owe wealth taxes even if they failed to take any action, like earning income or selling assets.

The new tax regime will target properties and assets such as cash, businesses investments, and real estate.

“The economic principles of equitable taxation require that the tax burden reflects ability to pay. This is best achieved by a hierarchy that taxes wealth, consumption, income and trade in that order of preference. Our tax regime currently falls far short of this,” Dr Ruto said.

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