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Widen the tax base but sealing the leaks is a greater strategy

Times Tower Building in Nairobi which hosts Kenya Revenue Offices (KRA). [Wilberforce Okwiri, Standard]

From the time he took office, President William Ruto has pushed for widening of the tax base to improve government revenue. This is a great strategy towards putting the nation on the path to self-reliance. Economic independence is the greatest freedom any individual, institution or nation can attain.

As long as we remain net borrowers, there is no way we will ever determine our own destiny. Economic “partners” will consistently put stringent conditionalities for our access to their resources. Some of these demands are often counter to our national values and ethos.

And yet there we have little room to wiggle as long as our bargaining power is neutered by our weak economic status. For as the wise man Solomon observed, the rich rule over the poor and the borrower is a slave to the lender.

Though our natural reaction to paying tax is rarely positive, taxation is a practice duly recognised by God and well recorded in the holy scriptures. It a legitimate means for supporting government operations.

Joseph established a special tax in Egypt to store grain in preparation for a predicted famine. When confronted by some of His followers on whether or not to pay taxes, Jesus made the now famous statement, “Give to Caesar what is Caesar’s, and to God what is God’s.”

On another occasion, when tax collectors came to Him for taxes, Jesus paid not only for himself but also for His disciples.

Writing to believers on the same, Paul advised all to pay taxes, “for the authorities are God’s servants, who give their full time to governing.”

He further ordered that we should give everyone what we owe them: If you owe taxes, pay taxes; if revenue, then revenue; if respect, then respect; if honour, then honour. Thus, tax remittance is not just our patriotic duty but also a divine mandate.

We commend government for various efforts towards a more harmonised tax regime, and KRA for developing easier tax remittance systems. We equally commend them for going out of their way to encourage compliance.

For sure, when taxation is more harmonised and tax remittance made easier, there is every likelihood of better compliance by faithful Kenyans who would want to support national development.

However, even as efforts are made towards better collection of taxes, our hope and desire is for a visible commitment to more prudent use of resources. It is discouraging for faithful Kenyans to sacrifice a significant portion of their earnings to finance government, only for such resources to be squandered in opulence and wanton greed.

I doubt that the tax collector is happy either, when they see the fruit of their labour simply wasted away.

But, more importantly, we need to see tangible efforts at tackling corruption, which continues to cannibalise our contributions.

In a report widely publicised by the BBC a few years back, the Kenya government admitted to losing nearly one-third of the national budget to corruption. This is a staggering figure.

Former President Uhuru Kenyatta equally admitted that over Sh2 billion was lost daily to corruption. This means our tax burden could be less by about one third if corruption was decisively dealt with. Instead of paying 30 per cent in personal income and corporate tax, we should be paying 20 per cent or thereabout! Instead of 16 per cent VAT we should be paying about 11 per cent. The implications are profound. Imagine what this could do towards spurring economic growth.

It is unfortunate that in spite of several efforts by the government to tackle corruption, there seems to be a concerted resolve in certain quarters to sabotage such endeavours. Corruption has become endemic – completely etched into our national psyche.

Only radical and ruthless actions will rid us of this national cancer – and it must be prioritised. For unless and until this is done, widening the tax base will only come with an expanded looters network.

We thus totally agree with the call by President Ruto to KRA to seal all revenue leaks. For whereas widening the tax base is great, sealing the leaks is even greater.

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