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Tax evaders are a burden to compliant Kenyans

Thursday, September 5th, 2019 00:00 | By
KRA headquarters. Photo/File

“Render unto Caesar the things that are Caesar’s, and unto God the things that are God’s.” 

In this popular Matthew 22:21 verse in the Bible, Jesus sought to solve the then heated debate regarding the relationship between Christianity, secular government, and society.

Specifically, the response was directly related to a question Jesus was asked whether it was lawful for Jews to pay taxes to the government. Interestingly, this issue is still relevant and controversial today, as it was then.

Just think about it. Where does the government get funds to undertake its countless responsibilities for the public ? 

Who foots the bill for free education, the roads we drive on every day, civil servants salaries, subsidised drugs and operations in public hospitals et al?

It is rather obvious that the money has to come from a dedicated pool through various contributions. But to fill this pool in order to keep the country functioning efficiently, every adult citizen has to play his or her role by paying taxes.

Indeed, it has been said that taxation is the only known practical means of collecting resources, in order to finance public expenditure for goods and services consumed by citizens. I am not aware of any  completely tax-free country.

Since only a few of us are ready to part with statutory payments without some sort of coercion or incentive, governments usually enact taxation laws to inform and guide this process. 

Though some Kenyans work hard to evade this simple but crucial responsibility, it comes back to haunt them sooner or later when caught up with, with dire consequences. For instance, many citizens have lost lucrative contracts, or missed plum jobs, simply by not being tax compliant.

There are two main categories of tax evaders. On one side are those who simply fail to declare their true earnings or revenue as a way of ‘stealing’ from Caesar. 

On the other are persons who simply have no idea of their legal tax obligations under the country’s tax regime. But as they say, ignorance is no defence in law.

Contrary to popular belief, tax laws are not the preserve of lawyers or financial experts. A country’s tax law covers the rules, policies and laws that oversee the tax process. 

The law stipulates various levies on things like estates, transactions, property, income, and licences. 

Arising from promulgation of the Constitution of Kenya 2010, the country has a two-tier tax system. These are the national government, and the 47 county governments. 

The former retained powers to impose direct taxes including income taxes, and indirect taxes namely value added tax (VAT), excise duty, and customs or import duty.

At the other level, county governments were given powers to impose taxes on property, entertainment, and other taxes that are feasible at this jurisdiction. 

Of the total tax revenue collected by the government over the last decade, the largest contributors are income tax, about 40 per cent, followed by VAT at 28 per cent. Other taxes form the rest of the Exchequer’s revenue.

Ultimately, every citizen pays taxes in one form or another. Abdicating this responsibility places the burden more on others, and compromises the quality and quantity of public services that the government offers.

— The writer is a communication expert, and public policy analyst. [email protected]

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