From the recent painful budget speech read by the man in black, taxation of key commodities will be a blow to the average Kenyan who is already struggling with inflation. This almost sounds like it was ripped from the scriptures, and I quote; Mathew 13;12: “whoever does not have, even what they have will be taken from them”. The common mwananchi will have to dig deeper into their pockets, in order to finance the Sh3.1 trillion budget. High taxations have been levied on alcohol, betting and loans. Apparently the first two have been labeled sin tax. If it isn’t the end times. Paying for our sins.
The tables have turned. Robin hood has taken to robbing the poor to give the rich. Wanjiku who is already struggling to put food on the table, is being overburdened. With the prices of basic items such as unga, milk and medicine set to go up, the impoverished families will become more vulnerable.
When it comes to investing, the average Kenyan isn’t all too favored either. If you don’t have a fat paycheck to invest in property (which has been given tax benefits), this land is not your home. Take for example the boda boda sector. This has been a big source of self-employment especially for the youth. But now it has been hit hard with a comprehensive insurance cover. While this promises to mint for insurance companies billions of shillings in premiums, what happens to the struggling Kenyan?
In a raft of painful measures to plunge more people into the taxation pool- The youth who are making money from the digital economy will no longer live outside the tax dragnet. With unemployment taking a toll on the youth, many had sought refuge on online jobs as it offers a glimpse of hope in this tough economic times. However, they too have not been shown any mercy.
The Ajira digital program meant to introduce young people to online work, is now imposing a registration fee of Sh10,000 to those enrolled. This is in lieu of income tax with effect from 1st January 2020 and will be implemented for 3years. With many people still unable to fund their varsity fees, this is a slap on the face. And as the future of a nation lies with the young generation, are we set on the right path to a promising future?
Profit making companies will also incur high income tax. This has seen investors already threatening to cut on employment or relocating from the country. Imagine a company employing 1000 people relocating to another country. That is 1000 families losing a source of income. Some being the sole bread winners. This is in contrast with the budget theme: “creating jobs and transforming lives”. The irony.
The proposed budget is instead set to protect owners of capital, government suppliers and other interest groups that run the economy. This will do little in reducing the gap between the rich and the poor. Another contrast, this time with the Jubilee’s 2013 manifesto.
The government should instead increase revenue by cracking down on graft and by taxing the richest more. Instead of forcefully trying to balance the books on the backs of the poor. We hope they do better next time.