No new taxes until UhuRuto have a change of values

President Uhuru Kenyatta and his deputy William Ruto.

Just when you thought it was safe to go back to the fuel station or supermarket you are warned that another round of taxes are coming your way and that Kenya is going to borrow more and spend its way out of debt. The National Dialogue Forum (NDGI) had recommended that mega projects like the SGR from Naivasha to Malaba and the proposed Nairobi to Mombasa Highway be put on hold until such time as the debt burden eased and the country was in a position to feed itself. But Jubilee and its new friends have other ideas and are determined to leave a legacy by 2022. 

However, if we are to judge by the figures their legacy may well be just an unmanageable debt. Currently the national debt is Sh5.27 trillion and that is expected to rise to Sh7.17 trillion by 2022. More worrying still is that 80 per cent of that debt is incurred since Mr Kenyatta and Mr Ruto ascended to office in 2013. What have they achieved to justify such a huge national debt? If half of the taxes are used to service the debt then what will remain for development and devolution after the recurring expenditure is deducted? 

So what do you do? There is little doubt that the country requires major infrastructural development if it is to emerge as a prosperous, modern and more equal society. The question is how you achieve that without mortgaging the country and burdening the next generation with excessive debts.

Perhaps the example of USA might throw some light on the matter. Few who have visited that country fail to be impressed by quality of the roads and especially the Interstate Highways. However, how many realise that the whole idea was the brainchild of President Dwight Eisenhower. His plan was approved in 1956 and in a decade the country went from possessing a mere 1,000 miles of interstate highway to completing 41,000 (Km. 65,000). Eisenhower had foresight and vision predicting that within a couple of decades the economy would be based around the motorcar.

He spent $25bn per year on the plan but most of this was recouped by way of fuel taxes (70 per cent) while the remainder came from road tolls that still maintain the highways until today. This may appear as an endorsement for Mr Kenyatta’s 8 per cent VAT Law. However, there are essential contextual differences that must be noted.

Kenya is a very unequal society so when additional taxes are introduced it is those at the bottom who feel the pinch most of all and who can ultimately scuttle the best of plans. The fuel tax has been passed on at an inflated rate to Wanjiku and the government is doing nothing to cushion those suffering the most.

Oxfam reported last year that 99 per cent of the Nation’s wealth is in the hands of 8,300 Kenyans. Besides, tax dodgers evade payment of $IBn each year. There may be 5.6 per cent GDP growth each year but it is far from equally distributed. When it comes to salaries the richest 10 per cent earn 38 per cent of the total income while 50 per cent only earn 19 per ceent of the income. Kenya is the fifth richest country in Africa and the super rich increased in number by 16 per cent last year.

Point here is not that we don’t need to pay taxes but we need what Oxfam calls Fiscal Justice and that should begin by reforming the personal taxation so that those who are better able should pay more and in the process will benefit more from growth. 
The other factor of course is that of trust and integrity. As long as one third of the budget is looted or wasted who in their madness would reach deeper into their pockets? Besides, the extravagant Executive and Legislature does not show any interest in austerity plans. They may shed crocodile tears but those are the new Pharisees that Jesus chastised when he said, ‘They tied up heavy burdens and lay them on people’s shoulders, but will not lift a finger to remove them’ (Mt 23:4).

Mr Ruto and Mr Kenyatta must put their house in order if they are to gain the trust and respect of the public. Right now there is a general reluctance to support new loans because corrupt tendering leads to inflated prices and overburdening the public with extra taxes. No tax, no thanks until the self styled digital team have a radical change of heart and values. That is the real issue.

- [email protected] @GabrielDolan1