By CONSTANT MUNDA
The financial and insurance sector has for the first time overtaken manufacturing to become the largest source of tax revenue for the Exchequer, shinning the spotlight on the dwindling competitiveness of Kenyan factories.
Statistics from Kenya Revenue Authority (KRA) show tax receipts from the financial services sector, dominated by risk-averse banks, grew Sh17.29 billion or 11.64 percent to nearly Sh165.84 billion in the fiscal year ended June 2019 compared with a year earlier.
The faster growth helped the sector to narrowly dislodge manufacturing from the top of the list of largest revenue contributors after the latter’s tax receipts expanded by Sh10.05 billion, or 6.52 percent, to Sh164.30 billion.
The slowdown in growth of tax revenue from factories reflects the shrinking contribution of manufacturing to Kenya’s Gross Domestic Product (GDP).
Manufacturers have in the past largely blamed inefficiencies, higher levies, taxes and energy prices for ramping up cost of production, cutting the competitiveness of Kenyan factories by about 12 percent compared with global average…Read more>>
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