Public participation can’t be overlooked in tax policy making

Unlike other laws, tax laws have both direct pecuniary and compliance burden on citizens. FILE PHOTO | NMG
Unlike other laws, tax laws have both direct pecuniary and compliance burden on citizens. FILE PHOTO | NMG 

Article 10 of the Constitution provides for public participation as one of the national values and principles of good governance. This value gives citizens an opportunity, in addition to their indirect representation through Parliament, to directly contribute to major public decisions and processes affecting them.

The principle of public participation is no doubt an important aspect of the social contract theory, where the citizenry relinquish some of their rights and privileges to the state, pay taxes to maintain the state and in return the state provides basic social services and amenities.

In the past public participation has been at the heart of many litigation cases and constitutional petitions, and the courts have on numerous occasions underlined its importance.

Otherwise noble initiatives by the government and public entities have in numerous cases been stopped in their tracks due to failure to abide by this important procedural and constitutional requirement.

The enactment of tax law has not been left behind in that regard. There have been several cases challenging the validity of tax laws and policies, which are grounded on absence or sufficiency of public participation.


The most notable ones are the recently decided petition on the validity of the Excisable Goods Management System (EGMS) and the ongoing petition challenging the validity of the Double Taxation Agreement between Kenya and Mauritius.

The High Court’s decision to suspend the EGMS was largely informed by lack of public participation. This decision has set a tough precedent and going forward, we expect to see a paradigm shift, where the public will be more involved in formulation of tax laws and policies.

Woe unto public entities that proceed on important policy and regulatory matters without public participation.

According to the courts, taxation or any policy that creates a financial burden upon citizens must as of necessity be subjected to adequate public participation wide enough to cover a big chunk of the population so as to be sufficient.

In his recent judgment against KRA, Justice John Mativo emphasised on the involvement of the specific segments which may be directly affected by the relevant tax policy. This places a higher burden on the policy makers to ensure a more intensive roll out of the public participation process.

Unlike other laws, tax laws have both direct pecuniary and compliance burden on citizens. Due to the weight of the impact on the people, the importance of public participation cannot be understated.

First, it ensures that citizens get an opportunity to voice their views, concerns and expectations with regard to the policies and laws. This promotes inclusivity if the representations by the members of the public are taken into consideration.

Secondly, it affirms the legitimacy of the entire process. That is to say, in cases where the representative democracy is insufficient, public participation fills the gaps by complementing the shortcomings.

This comes in handy especially in the wake of intensive lobbying in tax law legislation by cartels, consumer and producer groups.

Thirdly, it guarantees quality of the policies and laws being churned out through the whole process. By involving the people, the formulators get to understand the issues from the perspective of the subjects and (hopefully) take into account the real time experience on the ground.

Samuel Kioko Musyimi is Senior Tax Associate at KN Law LLP.