In Summary
  • Comparative prices of diesel and kerosene on the one hand and petrol seem to favour petrol, which is used by fewer Kenyans, who are often wealthier than those who use diesel and kerosene.
  • Every year the auditor’s reports show that nearly a third of the money that the government raises is misused or stolen.

The government has lately been urging Kenyans to pay more taxes if they want services and development to reach them.

As the national debt and cost of running the government balloon, the exchequer has looked for more ways to raid the ever emptying pockets of Kenyans.

Often one reads in the business pages of Kenyan newspapers the claim that Kenyans are among, if not, the highest taxed people in the world.

Yet, how many Kenyans understand how the tax system in the country works? What is the history of Kenya’s tax system?

Does the government have justifiable and legal reasons to raise the taxes that it demands from Kenyans today when evidence seems to suggest that collected tax is wasted?

These questions, among many others relating to tax collection and spending, are relevant because the annual report by the auditor-general shows serious profligacy by government officers.

MISUSE

Every year the auditor’s reports show that nearly a third of the money that the government raises is misused or stolen.

The names of the institutions embezzling State resources and those of individuals who should account for the lost money are listed but nothing really happens to show that the collective taxes are put to good use.

Yet even when these troubling reports come out, there is hardly sustained public discussion on why taxes are collected at all by the central and local governments, what types of taxes should be collected, from who, when, where, how, and to what use the money should be put.

Where and when the debate happens, it is most likely among very specific civil society groups dealing with tax justice and consumer protection.

Which is why reading the book Taxing Africa: Coercion, Reform and Development by Mick Moore, Wilson Prichard and Odd-Helge Fjeldstad (Zed Books, 2018) is a big eye opener.

EQUALITY

The three researchers at the International Centre for Tax and Development, in Brighton (UK), writing in a most accessible language, for a book dealing with such a complicated subject, highlight a number of issues, which they correctly call the big questions in taxing Africa.

These include “the diversity of tax experiences” — dealing with what they term the “many different tax worlds in Africa”, from the big taxes from the multinational corporations (MNCs), to the “world of small taxes”, such as the ushuru collected by county government officials at the local markets.

This is a very sensitive subject considering that many ordinary citizens, most often in the countryside, pay several “small taxes” which is a significant proportion of their income.

The next big question is that of fairness, equity and inequality. In other words, what are the implications of supposedly progressive, direct taxes, as opposed to regressive, indirect taxes?

How does charging equal value added tax on essential commodities affect the poor compared to the rich?

For instance, most farmers and small and medium enterprises use diesel for machinery, while a majority of Kenyans use kerosene for lighting and cooking.

TAX EVASION

Yet, the comparative prices of diesel and kerosene on the one hand and petrol seem to favour petrol, which is used by fewer Kenyans, who are often wealthier than those who use diesel and kerosene.

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