When the 2019/2020 revenue performance was published, everyone was shocked as the performance was fairly above the expectations of many. Despite the Covid-19 pandemic striking and paralysing economic activities towards the end of the third quarter of the financial year, the country’s resilient economy still managed to release Ksh. 1.607 trillion in revenue.
According to the taxman, the Ksh. 1.607 trillion collected by the end of last June translated to a 1.7 per cent revenue growth compared to 2018/2019’s collection of Ksh. 1.580 trillion.
As the global health crisis spread its tentacles in our country, the government instituted a raft of measures to cushion Kenyans from the trail of adverse effects left behind by the pandemic. Changes to the tax laws constituted the bulk of the said measures. For instance, the value added tax (VAT) rate was reduced from 16 per cent to 14 per cent. Workers with a take-home salary of Ksh. 24,000 and below were granted a 100 per cent tax relief to ensure they had more disposable income. The highest tax rate was also slashed by five per cent to 25 per cent.
Without a doubt, the tax law measures put in place by the government and the dwindling economic performance have had a direct impact on revenue collection. They have meant less revenue in the national coffers. However, as noted earlier, the revenue remarkable performance posted at the end of the financial year painted a picture of a very resilient and promising economy.
This in turn begs the question, in the absence of a crisis like the one at hand, how much more revenue does Kenya have the potential to mobilise to self-fund her development? I believe the silver lining in the Covid-19 pandemic is a rare eye opener to the tremendous potential that lies within our country’s resilient economy.
If everyone eligible to pay taxes pays, as Kenya Revenue Authority (KRA) boss Githii Mburu likes to put it, “not a shilling more, not a shilling less”, we have room to raise enough revenue. In turn, Kenya’s name will no longer be on the list of countries with a burgeoning foreign debt. That way, we will be in a better position to comfortably and independently fund our development agenda.
It is therefore incumbent upon every eligible taxpayer to honour their civic and patriotic duty truthfully and honestly for a better country.