End row between State House, KRA
Investigations by the People Daily have indicated that orders issued by the President and his Deputy could be hurting tax collection and that the effects of these could start manifesting in the next quarter.
This calls for quick rapprochement between State House and the Kenya Revenue Authority to ensure that tax evaders and dealers in counterfeits and contraband goods do not thrive due to the loophole created by the dispute.
The government is under pressure to raise revenue as it seeks to fulfil the pledges its leaders made ahead of the August 9 elections. Whereas KRA has a duty to collect taxes, it also has a responsibility to do so humanely and to expand the tax base so that the tax burden can be distributed more proportionately.
One of the foundations of government is that taxation and representation should go hand-in-hand. In Kenya, however, there are more voters than taxpayers and this is part of the challenge that the government is facing. The voters want their government to deliver services but not all have been paying taxes. The result is that KRA has been hard on those already paying to make them pay more. No wonder business owners felt that KRA was targeting them unfairly.
The new administration, naturally, felt the need to protect the business owners who felt targeted. This informed the decision by the President and his Deputy to give the directives to KRA, asking it not to close down businesses but rather, find ways of making them comply with tax regulations. The risk, however, has turned out to be that some of those businesses deal in counterfeit and contraband goods. Should they be closed? Should the goods be seized and destroyed? This is the question that KRA is grappling with.
As a way forward, State House needs to engage the tax authority quickly so that both can agree on the next course of action and end the impasse that, if it continues, will leave KRA’s hands tied. This is a situation the government must not allow.
The difference between the two institutions is not fundamental. If anything, it is arising because Kenya has a new administration that wants to do things differently, including by making it easier to do business, a key plank in its job creation agenda.
Still and all, the law is still in place and KRA cannot afford to sit back and wait for unequivocal signals if its officers are aware that unscrupulous business people are trading in fakes and contrabands. Besides denying the country tax, such businesses endanger the lives of Kenyans. They must be stopped. But for that to happen, State House and KRA must resolve their differences.