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December 17, 2018

Strike balance for a fair tax system

A petrol station IN Westlands./ EZEKIEL AMINGÁ
A petrol station IN Westlands./ EZEKIEL AMINGÁ

It is imperative that governments must collect taxes to fund health, education, security, water, social security and a myriad needs, which cannot be handled by individuals or private business.

Taxation dates back to the days of Jesus and Zacheus the tax collector. Given an option, many would rather not pay, yet expect public services.

It is, therefore, prudent for governments to strike a balance and ensure a fair tax system. 

A 2017 report by the Paris-based Organisation for Economic Corporation and Development shows Kenyans are the third most taxed citizens in Africa after South Africa and Swaziland. 

Direct and indirect taxes are increasingly becoming a burden in a country where the majority survive on about Sh100 a day.

The annoying part is that the bulk of the revenue raised is spent on recurrent expenditure, with little allocated to development.

The 16 per cent VAT on fuel will only make a bad situation worse with the resulting production and transport costs passed on to an already overburdened citizens.

Such a heavy tax load and more so if it does not match the services provided are recipes for revolutions.

Kenya must rethink its tax policies and further explore other revenue bases because taxation can only be stretched to a certain level before the cord snaps.




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