New taxes lined up, but where’s the money to be taxed?

Jesus's story in the Bible offers a valuable lesson which the Kenya Kwanza (KK) government should borrow: He did not come to introduce new laws or abolish the old ones but to fulfil them.

Similarly, the KK government should be cautious in introducing new taxes. It is essential to ensure that existing tax revenues are used efficiently and effectively before imposing additional burdens on the population.

The government must demonstrate that tax revenues are being used efficiently to improve public services and infrastructure.

Quality education and well-equipped hospitals are basic expectations. Unfortunately, rampant corruption and economic mismanagement often mean that tax money is wasted or siphoned off. Therefore, curbing corruption and related vices should be a top priority. Without this, any new taxes will be met with resistance and skepticism.

Read: High taxes dampen Kenya’s Silicon Savannah dream

While the principle of taxation is an essential component of governance, designed to fund public services and infrastructure, it is crucial to consider the broader economic context before imposing additional financial burdens on the populace. The primary question remains: where is the money to be taxed when many Kenyans struggle to make ends meet?

Before imposing new taxes, the government should focus on job creation to ensure that citizens have the means to pay these taxes. This requires fostering an environment conducive to industrial growth.

By creating industries, we provide people with opportunities to earn a living, which in turn broadens the tax base. It’s a simple yet effective strategy: when more people have jobs, more people can pay taxes.

Attracting investors is also essential, and to do this, the government must create a conducive environment by lowering the cost of production. High energy costs, for example, deter industrialists from investing in Kenya.

By reducing these costs, the government can attract more investors, who will create jobs and contribute to the economy. Encouraging business innovations and supporting entrepreneurs will also play a significant role in driving economic growth. Introducing taxes on essential items like bread is counterproductive.

Bread is a staple food for many Kenyans and making it more expensive through taxation will only exacerbate food insecurity. Instead, such essential items should be tax-free. Similarly, introducing a motor vehicle tax seems redundant when motorists are already paying a fuel levy. This double taxation does not only burden motorists but also discourages vehicle ownership and use, which can negatively impact economic activities that rely on transportation.

The introduction of more taxes will likely make hustlers hopeless and desperate. The focus should instead be on curbing economic wastage in government institutions and implementing policies that promote economic growth and stability. By demonstrating that taxes are used effectively, creating jobs, and fostering a business-friendly environment, the government can build public trust and encourage a more supportive attitude towards taxation.

While taxation is a necessary tool for funding public services, it must be implemented thoughtfully and fairly. The government should prioritize job creation, attract investors, lower production costs, and curb corruption before imposing new taxes. By doing so, it can ensure that taxes are a reflection of economic growth and prosperity rather than a burden on struggling citizens.

Kubai Njuguna is a PR and Communications practitioner based in Nairobi. [email protected]