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Why are we turning KRA into a spy agency?
Importers camp outside KRA offices at Times Towers, Nairobi in July 2018. They were protesting against delays in the release of their goods, which they claimed were substandard. They were also aggrieved by increased taxes.
Under the tax amendment laws presented to Parliament on November 4, it is proposed that the taxman be given powers to intrude into the taxpayer’s privacy by integrating the information on mobile phone transactions into the Kenya Revenue Authority (KRA)’s own systems.
I recently came across documents showing that, away from the limelight, plans are underway to introduce new gadgets called custody flow meters which will be installed in fuel dispensing pumps at petrol stations, oil depots, electricity meters, electric vehicle charging stations and smart water meters.
Through this gadget, information on transactions between citizens, institutions, and key utilities will be captured at Times Towers on a real time basis. The citizen will have nowhere to hide from big brother because the taxman will be spying on financial transactions all the time.
We must all accept that those who defraud the taxman of revenues should by all means be brought to book and held to account. But the means used to catch the tax dodger must not be such as to offend personal freedoms, rights to privacy and rights granted to citizen under data privacy laws.
When you look carefully at recent trends, what you see is a taxation regime that is –perhaps unwittingly-gradually trending towards adopting values of a police state.
The best evidence of this is the brutality KRA enforcement staffers display whenever they mount raids in premises of businesses suspected of involvement in tax evasion.
The incumbent policy elite must not forget that descent into a police state is deceptively easy and that excesses by enforcement staff can turn out to be counterproductive in the long run.
Currently, the government is under immense pressure to raise money to fund the massive budget deficit and to comply with performance benchmarks it has agreed on with the International Monetary Fund (IMF).
But as we frame new tax policies and introduce new amendments, KRA’s enforcement staff must guard against the dangers of introducing the values of a police state.
Yes, nobody is above the law when it comes to paying taxes. But it is equally true that so long as the 2010 Constitution remains part of our laws, every taxpayer in this country is above terrorism and brutality of the taxman’s enforcement staff.
Just the other day, during the high-profile ceremony where KRA celebrates its biggest and most-valued taxpayers, speaker after speaker went on haranguing the attendees at that event paying taxes was a patriotic duty for every citizen.
The question many taxpayers ask these days are; - is paying taxes really an act of patriotism in this country when it is clear to every citizen that this is just money to facilitate ostentation and that at the end of the day goes mainly in paying for expanding waistlines of greedy elites- governors, Cabinet secretaries, holders of constitutional offices, members of county assemblies, judges and MPs?
In a context of a government that is deeply rooted in abstentious consumption- where Cabinet secretaries and principal secretaries are allowed to have multiple fuel-guzzlers, complete with chase cars, where governors, Cabinet secretaries are allowed to hire as many advisers as they choose, a government that buys the Chief Justice a Sh20 million Land Cruiser, can you really defend the prevailing high taxation regime on the grounds that paying taxes is a citizens patriotic duty?
Until we see significant measures to curb waste and ostentation in government spending followed by ruthless pruning on programmes and projects of doubtful economic and social merit, no number of sermons will make the ordinary citizen of this country believe that paying taxes is an act of patriotism.
When you track the latest published budget outturn numbers for October this year, the picture you see is that the government is still walking a fiscal tightrope.
With debt service to revenue numbers still above 50 percent, there is just no fiscal space to fund anything extra ordinary.
The government is merely surviving by accumulating arrears on exchequer releases to county government, by postponing expenditures on pensions- and by freezing the development budget.
Pundits have been predicting that a debt default as happened in Ghana last year was imminent. The predicted fiscal apocalypse has not happened. This month, the National Treasury received temporary reprieve when it revived a disbursement of Sh50 billion from the IMF.
Are high taxes the only solution? We should go back to economics textbooks to read about the Laffer Curve.
The writer is former Nation Media Group Managing Editor for The EastAfrican.
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