By Ronald Njoroge NAIROBI, (Xinhua) --
Campaigners on Monday urged Kenya to prioritize
domestic resource mobilization in order to reduce reliance on
Tax Justice Network Africa Deputy Executive Director Jason Braganza
told a media briefing in Nairobi that the current global economic
slowdown means that traditional donor nations are reducing overseas
“As a result, we recommend for Kenya and other African countries to
focus on domestic resource mobilization in order to reduce budget
deficits,” Braganza said during a civil society forum on the
proposed Nairobi International Financial Center Bill.
Kenya hopes that the Nairobi International Financial Center will
provide funding for key development projects as well as employment
opportunities for the growing youth population.
Braganza said that key sources of domestic resources include taxes
and natural resources such as minerals and hydrocarbons.
He noted that Kenya can achieve optimum domestic resource
mobilization by diversifying the economy.
The Tax Justice Network Africa said that in the long run, taxation
is a better way to fund government projects compared to use of
“Uncontrolled borrowing could result in public debt that is
unsustainable,” he added.
According to the advocacy group, tax incentives offered to
multinational corporations tend to deplete rather than build up the
country’s financial reserves and hence complicates efforts towards
domestic resource mobilization.
recent study indicated that Kenya loses approximately 1.1 billion
U.S. dollars annually in tax revenue by giving tax breaks to
corporations, according to Braganza.
He noted that tax incentives were not the best way to attract
foreign direct investments as “corporations are likely to move to
countries that have favorable business climate by having less
bureaucracy and proper security.”