Kenya Plans Tougher Tax Measures After Seeing Wider Budget Gap

Kenya is planning legislation to compel the payment of contested tax bills before courts rule on them as it seeks to boost government revenue and help plug a budget deficit.

Over 300 billion shillings ($2.9 billion) is held up in about 1,000 legal disputes, President Uhuru Kenyatta said Tuesday at a meeting in the Kenyan capital, Nairobi. “Most of these cases have stayed for more than two years,” he said.

The government is drafting a bill to empower the tax agency to enforce mandatory payment of tax even when it’s being contested in the courts. The bill will be presented in four months, Kenyatta said.

Kenyatta’s comments come after the National Treasury increased its 2019-20 budget-deficit forecast to 6.2% of gross domestic product from 5.9% earlier following revenue shortfalls. The government also plans to shift its debt-ceiling, effectively opening up room for more borrowing to fund planned infrastructure expansion.