Keep an eye on tax cheats


KRA Commissioner General Githii Mburu. FILE PHOTO | NMG

Whereas the Treasury is right in its quest to introduce a wealth tax for Kenya’s super-rich amid plans to aid the recovery of the economy, it should not be distracted from pursuing tax cheats.

What we need as country is a wider tax base and ensure that all workers and business people pay a fair share of State levies and duties. Yes, imposing a higher taxes on the rich looks easier and the moral thing to do. There is a global pressure for the wealthy to pay more duty and help impoverished populations survive the coronavirus and its economic hardships.

The problem is the structure of the Kenya economy lacks a sizeable middle class and has a few wealthy people whose riches are documented. This means that wealthy and honest tax payers risk carrying a disproportionately larger share of the tax burden with no guarantee that it would raise substantially taxes.

The Treasury’s bid in 2018 to impose a higher maximum tax rate of 35 percent from then 30 percent on high income earners came a cropper for these same reasons. What Kenya needs to do is keep watching high-net-worth individuals whose opulent lifestyles are not in tandem with the taxes they pay.