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The government wants to introduce a "wealth tax" to seize 0.05% of each bank transfer over 500,000 shillings.
Kenya is a relatively sophisticated economy but this new tax will hurt the efficiency of our financial markets. The tax seems small but the payments can be taxed several times.
For example, a foreign investor who purchases Treasury bills transfers dollars to his bank in Kenya to turn them into shillings and then send them to the Central Bank. These are three transfers that will be repeated in reverse when he will receive his interest payments. Thus, the investor can lose 0.3% of his money
This will make it more difficult for the government to borrow on the financial markets.
And will there be exemptions? Will transfers to KRA be deducted? Or wages? Or payments to and from the government?
For eight years, the European Union has tried to introduce a similar financial transaction tax on bond sales and shares.
The Treasury should drop this wealth tax Robin Hood
Quote of the day: " I have news for you, it does not matter. There is no Superman (it depends on us.) "
Tom Mboya
The trade unionist and minister was badbadinated on July 5, 1969.
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