In a number of Kenyans urban centres, citizens often gather at the town square to discuss politics and current affairs. Popularly known as Bunge la Wananchi, the discourse can be lively, intense and searing.
Last Monday, the Treasury Cabinet Secretary and I, attended Bunge at the Jevanjee Gardens, Nairobi. We engaged Kenyans on economic and tax issues. Away from the wood paneled board rooms it was, as the lingo goes, economics kwa ground.
After listening to our brief on the state of economy, reforms at KRA and on-going tax amnesty, citizens asked many probing questions, including how to explain what one Kenyan called “the divergence between the macro variables and the micro realities.”
They wanted to know how we plan to enhance public participation in policy making, why there is expensive air travel and State House renovations at a time of austerity, and worried that we might raid pay slips again.
They asked the CS to explain the reduction in equitable share to counties, for money and other support for small business, and for relief for the unemployed and poor, as promised in the various coalition election manifestos.
One citizen explained that by doubling licensing fees to Sh80,000 the environmental watchdog was driving micro and small waste management enterprises out of town.
Citizens asked why both spouses should pay housing levy, pushed for quick conclusion of corruption cases and asset recovery, and reminded us that university funding is still not working. They encouraged KRA to make better use of business intelligence. Here are our responses.
First, why are citizens not feeling the effects of low inflation in their pockets? Stagnation in credit to private sector for one, the CS explained. Small businesses have no credit to expand or growth their businesses, and when they find loans, it is too expensive. That is why over several months now, the Central Bank has been working to get the commercial banks to lower lending rates.
In addition, the fact that many Kenyans are out of work, means those with an income find it all the more stretched. Whereas both coalitions had promised relief for the out of work and poor, the lasting solution is to create more jobs, including by using technology to make agriculture attractive for young people.
Technology is key to increase productivity in agriculture, forestry and fishing, because workers are the least paid, earning less than one quarter of what their counterparts in transportation and storage services earn. It is no surprise then, that young people prefer to be matatu crews than work in farms.
Related, young people are better off in the technical training institutes or vocational schools. Workers in electricity, gas, steam and air conditioning supply services earn six times more than those in agriculture, and one and half times those in transportation.
We pledged to continue public engagement. The CS explained that he has used air travel sparingly, and that the State House renovations are a one off. Further he committed not to increase taxes on employment income any further.
The equitable share for the 2023/24 included a rollover of unpaid balances from the previous year, which is why the 2024/25 amount at Sh405 billion is less. The correct comparison is Sh387 billion from the previous year.
We promised to raise the Nema license issue with our colleagues and acknowledged that deep and impactful support to small business is work in progress. We could hardly argue with the commonsense proposition that since married couples ordinarily live in one house, perhaps only one spouse should pay the housing levy.
The slow pace at which corruption cases are handled led to a debate on separation of powers. The executive branch cannot instruct the judiciary, the CS said, while agreeing that speedy conclusion of these cases as well as asset recovery is a much-desired outcome.
I said iWhistle platform allows citizens to report tax malpractices and corruption anonymously.
Last financial year, citizens reported 833 cases on the platform, leading to the recovery of Sh4.22 billion and 41 lifestyle audits of KRA staff.
Earlier, university students had presented a memorandum to the High Education Loans Board (Helb).
At Bunge, acknowledging the hiccups, the CS informed the participants that so far in this financial year, he has disbursed Sh24 billion and Sh10 billion to the Helb and Universities Fund respectively.
A moral question remains. Should the wealthy expect support for university education?
The writer is the Chairman of Kenya Revenue Authority (KRA). Email: [email protected]
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