Fresh from party manifestos this week, I am struggling to reconcile just how all the promises made will be funded, in light of the already heavy public debt burden that we are servicing by way of build – operate – transfer and other public private partnerships in our quest for Vision 2030. As we get excited by the possibilities, the expectation must be punctuated by the calls from the Kenya Revenue Authority to individual and corporate citizens to meet their obligations.
The unfortunate truth is that a majority of Kenyan’s only pay for a single flavor of tax that is VAT, applicable to various non-exempt goods and services and therefore near impossible to avoid. According to the Economic Survey 2017 by the Kenya National Bureau of Statistics the informal sector accounted for 83.1 percent of employment to stand at 13.3 million persons against a total of 16 million, with micro, small and medium sized enterprises engaging 14.9 million.
It is estimated that there are between 1.5 to 1.7 million licensed MSME’s in the country and about 5.85 million unlicensed businesses. The same evasion culture exists here, powered by an economy where cash is still king and therefore that little more difficult to track, as it changes hands.
Here’s the thing, we will all gripe about poor service delivery and cite performance scorecards whose projections confirm what we have become accustomed to, as unmet goals and broken election run-up promises. This, leading to a vicious cycle of disappointment that no regime would be able to break free from unless we can cast the net wider and avoid placing the burden of development on the shoulders of “afew”.
Perhaps we need to start looking at “tax tech”, with a logical starting point being anonymized analysis of digital money movement mapped on daily transaction data from local banks layered with additional metadata from additional third party sources as we move steadily towards a cash-lite economy.
The thought maybe controversial in some ways if privacy pundits are to have a say, but it safely falls short of what the KRA in its quest to meet ambitious revenue targets wanted to do, which was to have unfettered access taxpayers’ bank accounts.
It is possible to have this ledger populated and mined in automated fashion to deliver the value that powers development.
Life, death and taxes should be the portion of every citizen in equal measure.
Update 30 June 2017
About 2.082 million Kenyans have filed their tax returns a day before the June 30 deadline, marking the first time the number has crossed the two million mark.
This is against 1.1 million Kenyans who filed their returns within the same period last year. The Kenya Revenue Authority has been processing 90,000 filings every day. KRA estimates the figure will hit 160,000 returns per day ………………..