Financial experts and the Controller of Budget have warned against increasing taxation on workers as this may push more households into poverty.
This they say, will lead to an economic crisis because people will prefer to use public transport instead of their private cars, and will cut expenditures on items they can survive without. Making a case that lowering taxes can stimulate economic growth, they argue that over-taxation will stifle economic growth and discourage investment and innovation.
This is because over-taxation reduces people’s purchasing power since they have less money to spend and this in turn reduces demand for goods and services and leads to less production and job losses. Therefore, the experts counsel that the government should eliminate the Housing Levy, return VAT on fuel to 8 per cent and create a favourable environment for investment.
They also advise fiscal discipline, less public expenditure, and end corruption and mismanagement of public resources. If all these experts are right, and the solutions they propose are the most viable, shouldn’t the government be responsive? Or perhaps, even share alternatives that they may have the experts may have overlooked?
This public engagement is healthy and demonstrates that State Officers are accountable and sensitive to the demands of the taxpayers who pay them. We have seven years before the expiry of Sustainable Development Goals (SDGs) in 2030 and if we remain on this trajectory, Kenya will not achieve the SDGs whose design we co-facilitated.
We shall not end hunger and reduce poverty. We also need to fix our education system to succeed as a country. At the core of this discussion are good governance and accountability. I have written many times about good governance.
Accountability is defined as an assurance that an individual or organisation is evaluated on its performance or behaviour related to something for which it is responsible. The performance of our State Officers and the institutions they manage must be evaluated and measured. One way of ensuring accountability is listening to advice and being responsive.
Yet, it appears that valuable advice and demands for accountability are generally ignored. The Controller of Budget says as she was working on reconciliations for the Consolidated Fund from where her pay and those of state officers are drawn, she discovered that someone in the Treasury had budgeted three times her salary yet she is the only state officer in her institution.
She added that the salaries of all other state officers had also been exaggerated like in her case. This could signal a return of ghost workers or blatant theft of public resources. State officers are the most highly paid in Kenya and an exaggeration of their wage bill puts Kenya into a financial crisis.
To put this into perspective, article 260 of the Constitution defines a State Officer as the holder of the following offices; President; Deputy President; Cabinet Secretary; MP; Judges and Magistrates; member of all constitutional commissions and independent offices under Chapter Fifteen of the Constitution; member of a county assembly, governor or deputy governor or other member of the executive committee of a county government; Attorney-General; Director of Public Prosecutions; Secretary to the Cabinet; PS; Chief of the Kenya Defence Forces; commander of a service of the Kenya Defence Forces; Director-General of the National Intelligence Service; Inspector-General, and the Deputy Inspectors-General, of the National Police Service; or an office established and designated as a state office by national legislation.
If the budget of their salaries is exaggerated three-fold, who is tapping directly from the Consolidated Fund? The responsible Treasury officials should be prosecuted and relieved of their duties.
If the Controller of Budget can publicly make such a statement, she must have made it to those to whom she is accountable and yet no explanation has been given to her to date.
This also raises other questions, for example, whether public participation in budgeting processes is still effective or whether Parliament is overseeing the budgeting process and utilisation of the budget and ensuring accountability.
Furthermore, if the Controller of Budget is not controlling the budget, who is?
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