Taxation pain and agony of unmet expectations

As a direct response to the challenging fiscal reality that President William Ruto’s government confronts, the price adjustments and sweeping tax hikes are a compelling option. Governments do not have many revenue generating activities apart from taxing people. Arguably, this government is pushing it to extreme levels reading from the Draft Medium-Term Strategy for 2024/25-2026/27 that the National Treasury shared last week.

Plans to introduce tax on extra-curricular school activities like swimming and on insurance premiums, among the many others proposed, do border on the ridiculous, but it is what it is and they will come to pass. President Ruto is living the reality of governing and managing an economy to safeguard national interest and create an enabling environment for business and wealth creation. He has to play hardball.

Grab power

It does not matter what he and his supporters said during the campaigns. They successfully lied to get the votes and grab power. A video clip doing the rounds in which then Deputy President and presidential candidate William Ruto is derisively questioning the government he was in why petrol should cost less in Uganda, a landlocked country that has to rely on Kenya for processing and to transit the commodity to Uganda is telling. Those questions are now being directed at him and he is dismissing them because he found what he knew he could find — he was in the kitchen when this bitter stew was being stewed. All we need to know now is what we are being told: That to service domestic and foreign public debt, run the government (and county) operations, fund Judiciary, Parliament, finance development activities, etc., then we have to borrow more and tax Kenyans a lot more.

There is a general belief that if this did not happen, then Kenya will default and start the freefall into the hopeless abyss of a banana republic. This could partly explain why the president has agreed to include the recovery of the economy in the agenda of the bipartisan talks with Opposition party Azimio, because it will be interesting to see what clever alternative measures they suggest to deal with the reality the country is confronting. Demonstrations will certainly not be a viable option.

But as Kenyans grapple with what appears to be an unending nightmare, it is extremely frustrating to see the disjointed nature of the government’s efforts to increase agricultural productivity against the unforgiving climate change reality. For instance, we all know that the destructive El Nino rains have been predicted to start in a few weeks, a timing that will coincide with the start of harvesting in key maize-growing areas of the North Rift. Yet, there is very little information being shared to prepare farmers to deal with what could be a costly natural occurrence.

Talk about an expected bumper harvest partly as a result of the subsided fertiliser that was offered to farmers may quickly turn into lamentation! Stated commitment to preserving the environment is undermined by Executive Orders to lift logging bans that have helped our forests start the recovery process. We want manufacturing to triple its contribution to the GDP yet can’t assure these brave investors of cheaper energy, etc.

Equally upsetting is the profligacy evident in government spending. Ministers and top-ranking officials are wandering all over the world, many displaying a dramatic transition from average possessions to ostentatious lifestyle, in search of what they only know. Meanwhile, they leave behind in government archives numerous bilateral agreements that if implemented would contribute hugely to higher revenues for the country. Does anyone track the implementation of those agreements and do they ever form part of the performance contracts of our Principal Secretaries?

The simple logic that you cannot keep asking for more resources and opportunities when that which you have is wasted must be on display here. These questions must be asked and answered. We should also be assured that with the higher taxation will come better services to the public. Kenyans must not be taxed out of their senses only for that cash to be pooled as largesse for cartels and their collaborating thieves to loot.

The writer, a former Chief Editor of the Nation Group, is now consulting. [email protected]; @TMshindi