Last month the government of Kenya decided that they will begin to tax some tax exempt goods such as Fuel. Now there has been a lot of backlash from the citizens and they believe that once the government begins to tax such goods especially fuel the cost of living will shoot up. Personally I don’t agree with this terminology, currently, President Uhuru Kenyatta signed the finance bill of 2018 to reduce the VAT of petroleum products from 16% to 8%. I strongly suggest that we as Kenyans should stop complaining and start paying the taxes.
Lets hold that for a moment and reflect on what actually 16% means. Now a matatu consumption is roughly 8km per litre of diesel fuel. I live 12kms from the CBD, so factoring that a litre of diesel fetches around 97 kshs so with fuel of 5 litres its more than enough for the journey from the estate till the city centre. so 16% of approximately 500kshs translates to 80kshs. Therefore the same journey that took 500kshs to complete now takes 580kshs to complete. So the matatu has a capacity of over 30 passengers, therefore if you do the math it translates to an increase of roughly 3 shillings per passenger. So can someone please explain to me where the high cost of living is coming from?
Now lets not forget that our country is full of “kartels“. They take advantage of their political connections to frustrate and impoverish Kenyans. They are in all sectors of our economy. All the way from lucrative government tenders all the way to the basic minimum such as transportation.
Its a known fact that the government needs our taxes to run their operations throughout the country from the legislators (who make laws), executives (who enforce laws), judges, and many others. When you work at a job to make money, you pay income taxes. Depending on how much money you make, a certain percentage of the money you make is withheld it’s known as paye. When you buy things at a store, you also usually pay value added tax (VAT), which is a percentage of the cost of the item charged by the store. If you own property, you also pay property taxes on the value of your property.
Paying your taxes is considered a civic duty, although doing so is also a requirement of the law. If you do not pay your taxes, the government agency that oversees taxes — the Kenya Revenue Authority or KRA — will require you to pay your taxes or else face penalties, such as fines or going to jail.
The money you pay in taxes goes to many places. In addition to paying the salaries of government workers, your tax dollars also help to support common resources, such as police and firefighters. Tax money helps to ensure the roads you travel on are safe and well-maintained. Taxes fund public libraries and parks. Taxes are also used to fund many types of government programs that help the poor and less fortunate, as well as many schools!
Right now we are paying transformation tax, all the projects that the government has taken up in terms of development are all financed through a loan and we will have to pay for it through our teeth. The cost of the standard gauge railway -SGR- will have to be recovered from the mwananchi. Its very disheartening and unfair that most of our taxes ends up in the pockets of kartels. However, I still support the government, we should all tighten our belt and pay our taxes as the alternative is worse…