Should you decide to tax more, for God’s sake, don’t steal it
"In this world," said Benjamin Franklin, one of America’s foremost presidents, "nothing can be said to be certain except death and taxes."
Those words must have rung true with many Kenyans who in spite of protests went to the petrol station on September 1 when a 16 per cent VAT kicked in.
The truth is Kenyans have no qualms paying taxes. And even as they anxiously wait to see what President Uhuru Kenyatta will do, most of them, if not all, understand too well the need for giving to Caesar what is Caesar’s.
Paying taxes is a sacrosanct civic responsibility. A duty that Kenyans have religiously honoured going back to the colonial era when the British levied a tax on their huts.
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So, VAT on petroleum products is no exemption. If the worst comes to the worst, Kenyans will grudgingly pay this tax.
If nothing else, the new tax should rouse Kenyans into action; to demand that they get value for their taxes.
In the unlikely event that Mr Kenyatta does not sign the Finance Bill 2018 as is and thereby suspend the VAT on fuel to 2020, his administration will have to demonstrate to Kenyans how these taxes—their money—will make their lives better. Far from what we have seen till now.
Somehow, something has to give in. In some place of the country, nothing much has changed since the end of the white-man’s Government some 50 years ago. In fact it is tempting to conclude that government by Africans has not been any better than the colonialists’. Kenyans are still being taxed heavily, even as they go without critical services such as water, healthcare, , good roads, schools, drugs and security. Even justice and fairness to a lot of them has proved elusive.
No wonder the MPs had to wait up to the last minute to make half-hearted attempts to postpone the levy. And even then, their act merely amounted to postponing a problem. Surely, the MPs ought to know better.
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So even before the introduction of the controversial fuel levy, taxpayers knew that they were getting a raw deal from their government.
For example, the money the Government collected, promising to bring down the cost of living by reducing power tariffs, beefing up security, ensuring everyone had access to affordable healthcare, and faster and seamless movement of goods and people, has been wasted, misappropriated or stolen.
There is evidence that most of what the Kenya Revenue Authority collects ends up in the pockets of individuals. One needs to read the Auditor General's reports to appreciate the rot in government. The EACC estimates that a staggering Sh500 billion gets lost each year.
This is money that should have gone into paving the roads, helping generate cheap power; or supplying farmers with quality seeds and fertilizers; or equipping hospitals with drugs and paying doctors; or paying teachers and police officer well. It doesn't do that hence the vicious circle.
Without investment in these areas, the cost of production goes up; power becomes expensive. While to be secure, firms must hire security guards; meanwhile, substandard seeds and fake fertilizers undermines food security and industrial unrests disrupt teaching and learning and on and on...
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Manufactures, for example, pay more for a unit of power and labour in Kenya compared to Ethiopia.
So to make ends meet, teachers engage in moonlighting and doctors open private clinics. Factories buy power generators should power go off.
No wonder education standards have been dropping. For a typical Kenyan firm, high electricity costs- together with labour and transport- eat into revenues, limiting and curtailing the room for expansion. Those who decide to brave the tough business environment, must pass on the high cost of production to consumers.
And because businesses are not expanding, the hundreds of thousands of young men and women leaving college every year have no jobs. Even start-ups are not spared. They die within the first year.
No wonder poverty levels remain high despite the rosy economic picture Treasury mandarins project every so often.
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In a nutshell; the government has not been working for ordinary Kenyans despite taxing them heavily. It should now work for them.
We laud President Kenyatta for his new-found passion to fight corruption, the source of much of what is wrong with the country. But we can only give him a score once the graft lords- who unashamedly continue to line their own pockets- are nailed.
Nonetheless, we hope he will feel the pulse of the nation and sign the Finance Bill 2018.
Benjamin Franklin16 per cent VAT kKenyansPresident Uhuru KenyattaMPsTaxTreasuryCS Rotich