In most developed countries, tax evasion is considered a serious crime that comes with severe punitive measures. Tax evasion is treated as such as it denies a given country requisite revenue to sustain herself.
Tax evasion is also rife in developing countries like Kenya. In the recent past, we have seen myriad cases of tax evasion trapped in the corridors of justice. The cases are a hallmark of the rot that is going on as a few individuals and firms try to beat the system with a view to evade tax payment. This then begs the question; do we have in place measures deterrent enough to annihilate the vice?
If what we have in place is not punitive enough to discourage the commission of this offense, then the recent proposal by the Kenya Revenue Authority to list tax evaders as well as defaulters with the Credit Reference Bureau might scale up the fight against tax evasion.
Tax evasion and other tax-related malpractices to a large extent constitute the bulk of the factors that hinder effective revenue collection that matches the set targets in a given financial year in Kenya. One of the direst consequences of these malpractices is excessive borrowing by the government because the little contributed by the diligent and patriotic taxpayers is too little to sustain the country.
Studies with an economic bias have unanimously agreed that Kenya has the potential to self-sustain owing to the vibrant economic activities undertaken on a daily basis. With this in view, you will concur with these studies that Kenya does not borrow excessively or fail to raise set revenues because the country lacks the capacity to raise enough revenue. The country has the potential to do so.
The legislative arm of the government in conjunction with the National Treasury should, therefore, pivot the taxman’s efforts in instituting more measures that will make our taxation framework more water-tight and more invincible to more efficiently fight tax evasion as well as seal all the leaks on the revenue pipeline.
