Heed experts’ caution on new harsh taxes
The country has top experts in various fields, whose wise counsel should not be ignored. They include the economists who are cautioning the government against its ill-advised plan to bring back the tax proposals that Kenyans roundly rejected.
Whereas it would be easier to brush off ordinary protesters, what the experts are saying about the taxes that have been denounced as “punitive and oppressive”, cannot just be swept under the carpet.
The Parliamentary Budget Office (PBO) has delivered a harsh and sobering verdict to the government on the new taxes. The think tank warns that reviving the unpopular taxes withdrawn following the Gen Z-led protests in June will not raise any additional revenues. The PBO notes that tax policy changes in the past have not always yielded higher revenue. Simply introducing new taxes does not guarantee better compliance or higher revenue
President William Ruto should listen to more experts and not just his economic advisers and Treasury mandarins. In the year ending June 2024, the Kenya Revenue Authority missed its revenue targets by Sh205 billion. In the previous fiscal year, it was Sh123.6 billion. This was the case despite new taxes, including the 1.5 per cent housing levy.
As former Treasury CS Njuguna Ndung’u also warned when he handed over to his successor, former ODM top official John Mbadi, higher taxes will not necessarily yield more revenues. Treasury should modernise and improve revenue collection, not through new taxes, but by tapping technology instead of burdening Kenyans.
What the country needs is an efficient and transparent tax system and not new taxes every time the government needs additional funds. The government should heed the PBO warning on the planned additional taxes, which can be counterproductive.
