YVONNE’S TAKE: Taxman must not be a hangman

If it is one thing I love about Kenyans, it is our ability to make light of all situations, good and bad. Tough and easy. And to the troops on Twitter, known as KOT, or Kenyans on Twitter, you remain undefeated in your ability to create memes that make us laugh in spite of the tough times. But these memes are not just for laughs, they are an important way of passing along important messages.

So, this week, it’s been all about the Kenya Revenue Authority, following a report in a local daily that they would begin monitoring social media posts in a bid to find tax cheats. And boy, have we laughed at the memes that have gone round. We have shared them over and over and discussed it in all WhatsApp groups, from the personal to the professional ones. As a result, KRA has even acknowledged that they have had increased inquiries regarding tax compliance during these funny times.

But, it’s all fun and games until the rubber hits the road. What those memes depict is actually a rather interesting relationship between the tax collector and the tax payer. One of fear, intimidation, akin to a teacher or a parent wielding a big stick to anyone on the unwarranted assumption that they may be cheating the government of what is rightfully theirs. In this case, art is a reflection of real life. Just ask the many small business owners that I speak to, every week on my Monday show, Business Now. They will tell you of cat and mouse games, of a tough relationship, of one that seeks to find fault, rather than one that seeks collaboration and understanding.

Now, don’t get me wrong, I do not expect KRA and taxpayers to be buddy-buddy. It is not a romance. But, what this brings to mind is that the tax policy needs to change in this country. The tax man is often seen as punitive. Take for instance the recent row over minimum tax which many had complained was not taxing profit but rather taxing capital investment, something that many said would effectively kill small businesses and startups.

Here is another example, a row between KRA and Mt. Kenya Breweries Limited where KRA shut down their operations over allegations that their beer bottles had over 16,000 fake excise stamps. A court ruling by Justice Weldon Korir on this was rather stinging. He ruled that KRA needed not shut down the entire operations of the business. Arguing that KRA indeed had the obligation to collect taxes, and the company had the obligation to pay taxes, but that shutting down the entire operations of the company was not helpful; “when KRA proceeds to kill businesses in the guise of collecting taxes, it becomes an undertaker and will itself eventually die since its survival depends on the existence of income generating businesses form which it can collect taxes.”

Now, there are many stories like this one, of heavy handed methods to collect taxes, of alleged extortion, threats and intimidation. Those in the water business will tell you of how they are being taxed to death and about to start to feel the pinch again with the new adjustments being made to excise duty on their products.

What of young tech startups who move their operations to other countries where the tax regime is more friendly?

And how about the people who choose to do their business online and are then followed there to pay digital taxes?

Listen, the Mama mboga who sells her wares on the street will happily pay her taxes if she sees value for money. If her taxes maintain the streetlights that enable her conduct her business late in the evening during rush hour when she can net most of her customers on their way home. When she can go to the market in the wee hours of the morning to get her supplies from Marikiti along well-lit streets that provide her security. When she can lay her mat on a clean, well tarmacked road, whose drains are clean. In short, to increase compliance, simply give taxpayers value for money by providing them with the services they pay for. That’s why they have the tagline ‘kulipa ushuru ni kujitegemea.’ But is that really the case now?

Well, what we need is to make tax easy to understand, easy to pay, easy to comply with. Otherwise, this excitement generated on social media recently will soon restore to factory settings, of hiding one’s true earnings, and avoiding taxes and the never-ending quest to widen the tax bracket.