Cardinal rules State should stop ignoring to end anger over taxes

Basic rules are being ignored in the ongoing disputes about taxation in Kenya. The first one is that tax should be simple for the taxpayers to understand. Once understood it will be paid and collected easily.

Another rule is that you cannot force taxes on the people. The moment you attempt to force people to pay tax, they object, refuse and design ways of both evading (illegal) and avoiding (legal) it.

By forcing people to pay, you encourage corruption because some of the tax enforcers also do not believe in that tax, and they extract small bribes from the disgruntled taxpayers.

Those who have read the history of taxation in Kenya know of a tax that was called "hut tax". Hut tax was introduced during colonial times and was to be paid by an adult male, according to the number of huts they had built in their compounds.

So, it was a progressive tax as the more huts you had, the higher the tax you paid. The tax was punitive because it was pegged on tradition. In those days, many people were polygamous and therefore whenever an additional wife was married, she was built her own house as no two wives would live under the same roof.

This punitive tax therefore forced men to go out to earn money to pay it because tax was to be paid in money (cash) and not in the form of cattle and goats which were used as dowry. 

To avoid this tax, one had to go against the tradition and keep two wives in the same hut or attach two huts to appear like one. These were crude methods of avoidance and they made people angry.

The other rule of good tax is evidence. People will pay taxes willingly when they can observe that the government is doing well by providing services such as building good roads and providing free education.

Enforcing taxes is one of the most difficult jobs. In the old days, men would wake up early and hide from their homes when chiefs and their askaris went to look for them to pay taxes.

In the American War of Independence in the 1770s, the clarion call was "No taxation without representation", and the colony fought until it got independence.

The Treasury should organise forums where discussions should be held with potential taxpayers so that they are brought to the same understanding as the tax collectors. The incidence in Kandara, Murang'a County, recently where the Kenya Revenue Authority staff were chased by potential taxpayers was unfortunate.

People know that the government needs taxes to meet the obligations of governing; to employ civil servants, provide security and to ensure smooth running of public schools and public hospitals, among others. As such, there should be no antagonism.

An example of a proper understanding of the role of tax was during the first two years of Kibaki's administration when taxpayers used to queue to pay taxes. They had witnessed free education being provided in the first month of that administration.

Treasury should consider engaging the Ministry of Education to have scholars go to schools to educate students about taxation; to explain to them, for example, that their schools are financed by taxes paid by their parents.

The students would then educate their parents. The tax officials should also be given refresher courses and education on how to approach the taxpayers. Visiting taxpayers in uniform like police does not encourage taxpayers. The taxpayers will close shop and hide. Tax collection should not be a hide-and-seek game. 

Prof Ngotho has taught forensic accounting in universities in Kenya, Cameroon, Namibia, South Africa and Zimbabwe, for over 40 years.