To avert a bigger debt crisis, GoK must reduce its debt load. That means paying it off without getting further indebted. Increasing taxes isn't an option. Further increase can only reduce total collection & degrade tax base.
There's only one remaining option - sell govt assets.
There's only one remaining option - sell govt assets.
Going forward, GoK needs to create fiscal space -trim Expenditure, esp wasteful recurrent spending & tame grandiose debt financed infrastructure while reducing tax rates to spur growth through private enterprise. A wide tax base is only achieved by broadbased growth in incomes.
GoK must understand tax is charged on income, not people. The greater the level of income & volume of economic activities, the greater the tax base & tax revenue. Higher activity volume is achieved thro number of transactions - people. Inclusive growth is thus critical.
Tax revenue growth can be achieved in two ways:
1. Volumes - higher volume of economic activities.
2. Rate - higher tax rate.
Only (1) is capable of growing tax revenue sustainably while at the same time accommodating growth.
1. Volumes - higher volume of economic activities.
2. Rate - higher tax rate.
Only (1) is capable of growing tax revenue sustainably while at the same time accommodating growth.
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