Raila: Increasing taxes is not the solution, audit ministries' procurement officials

He was speaking at the Jaramogi Oginga Odinga Foundation on Thursday as he met student leaders from universities across the country. 

Raila contends that in order to guarantee the government receives better value for its money and to stop leaks from shady officials, procurement should be carried out in a competitive manner under current legislation. 

According to him, some government ministry procurement officers are among the wealthiest people in Kenya; they are currently building a variety of mansions and apartments in rural areas and buying expensive fuel-guzzlers. 

"The procurement officers in the ministries—those are the boys in town, buying the latest apartments and highest end of cars," Raila said 

"They are the ones building castles in the villages, highrise buildings in village markets."

Raila, who shared a term in the Nusu-Mkate administration with the late Mwai Kibaki, claims that their attention was directed at dishonest procurement officers.  

According to the opposition leader, Kenya's economy was on the verge of imploding in 2002, after then-President Moi left office; donors had suspended financing to Kenya, and the taxman was only collecting Ksh.200 billion. 

According to him, after removing corrupt officials and employing fresh hires, revenue collection increased from Ksh.200 billion to Ksh.300 billion, then to Ksh.500 billion, and finally to Ksh.1 trillion without an increase in taxes. 

He said they realized that some procurement officers had flouted procurement laws by using companies or proxies to land tenders in government. 

He claimed that at the time, investigations revealed that procurement staff in various ministries were awarding tenders to supply other ministries in clear violation of the law. 

"You would see the one in Education ministry would be supplying the Health Ministry, and the one in Agriculture supplying Education," he said. 

"Some of them we sacked, some we took to jail... and hired new people, we came in government in January and between January and June we managed to collect Ksh.300 Billion from Ksh.200B," 

Raila said that during his tenure in government, Kenya was able to fund its development projects through funds collected by the tax man. 

"Only five percent were coming out of the country," he added. 

He argued that burdening Kenyans with extra taxes may not achieve the intended goal and will make a majority of Kenyans cut back on spending. 

He stated that in the last week, the country's fuel usage had dropped by 15% as many motorists sought alternatives, such as carpooling or other modes of transportation. 

"Many people are not driving, the traffic you used to see in the street is not there, many people are pooling, in fact consumption of fuel went down by nearly 15 percent last week," Raila said. 

"Increasing taxes is not a solution to the problems we are having, because if you increase taxes, there is always a tendency for people to evade."