Governors boxed selves into corner with rush to levy taxes

The governors may unwittingly have played into the hands of their myriad opponents when they rushed into levying more and heavier taxes on their constituents before improving service delivery.

It is particularly remarkable how easily the governors have boxed themselves into a corner by turning senators, their erstwhile allies who have been helping in the push for higher budgetary allocations from the National Treasury, into vocal opponents.

Perhaps, the governors will realise just how wrong they have been in antagonising their allies when the Attorney General, whose opinion the Principal Secretary at the National Treasury Kamau Thugge said he would seek, rules that the taxes levied by the county governments are unconstitutional. The senators pushing for the declaration that the new taxes are illegal argue that the public did not participate in their passing as the Constitution mandates.

The legal opposition to the new taxes is also anchored on Article 209 of the Constitution, which allows counties to only impose “property rates; entertainment taxes’’ and any other tax that it is authorised to impose by an Act of Parliament.

SEE ALSO :Counties yet to enact key laws, seven years later

So far, neither the Senate nor the National Assembly has granted authority for the counties to levy any new taxes apart from those that deal with property or entertainment. But to many Kenyans, especially those targeted by the new taxes, the legality of the entire exercise is a moot point. They are unequivocally opposed to them. Period. The new taxes have already sparked riots and protests in some counties including, but not limited to, Mombasa, Kiambu, Nairobi, Machakos and Meru.

The wide discrepancy between the levels of taxes imposed across counties does nothing to bolster the governors’ case. For example, the Busia governor would be hard put to justify the imposition of a Sh13,000 tax on a M-Pesa kiosk operator when his/her counterpart in Nairobi only pays Sh5,000 a year.

It is equally clear that the raft of taxes counties have rushed into enacting have the potential to disrupt trade within and across them. This is especially evident on taxes levied on the production, movement and sale of agricultural produce. The Controller of Budget, Agnes Odhiambo, has undermined the case for the new county taxes further with the revelation that many of the counties are collecting less than the defunct county councils that preceded them despite levying higher taxes.

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That means the path to higher county revenues should not be new taxes and increased amounts, but better enforcement of the old ones. So why did county governments jump to impose new taxes and increase old ones before streamlining the collection system?

 The way forward is for all the elected leaders — MPs and Senators — to lower the decibal levels of their discourse and find a solution acceptable to all.

SEE ALSO :Governors terms for backing BBI report

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Governors taxes counties