President William Ruto has underscored the critical role of micro, small, and medium enterprises (MSMEs) in Kenya’s economy, calling their contribution both significant and an untapped opportunity for growth.
Speaking during a national address, the President noted that MSMEs now contribute 33% of Kenya’s GDP and employ nearly 15 million people, representing 86% of the country’s workforce. Yet, they account for just 1% of tax revenue, highlighting a major imbalance in the nation’s tax system.
“This imbalance is not a burden; it is an opportunity, and we are seizing it,” Ruto said.
To address this gap, the Kenya Revenue Authority (KRA) has established the Micro & Small Taxpayers Department, a unit dedicated exclusively to individuals and MSMEs.
The department aims to serve the 1.2 million MSMEs currently in the tax base while facilitating the onboarding of over 5 million more, providing simpler processes, personalized support, and a fairer, more accessible tax experience.
Ruto pointed out that while 3 million Kenyans in formal employment contribute KSh600 billion annually, the remaining 17 million registered taxpayers contribute only KSh17 billion.
He said the new department will help expand the tax base and ensure that all Kenyans share in the responsibility of nation-building.
“The establishment of this department marks a major step in creating a more equitable and efficient tax system, supporting our entrepreneurs and strengthening Kenya’s economy,” he added.
