Courtesy: The Star Newspaper Kenya
By
Tom Odhiambo
I doubt that there is a country in the world where the receiver of revenue is a friend of the taxpayer. Not many individuals will willingly invite the taxman to take a share of their income or wealth.
Indeed, there are individuals and institutions all over the world whose only job is to help individuals evade paying tax partially or in total. Yet tax, like death, is a sure guest in every household in today’s economy.
Taxes come indirectly or directly; they are immediate or deferred; they hardly discriminate between the poor and the rich (even though the rich may actually pay less tax compared to the poor); they are all over, from the marketplace to school to church etc; and they are absolutely necessary in order for the economy to function.
Every taxman would be happy if all citizens paid their due taxes. If all citizens filed their tax returns, the Kenya Revenue Authority (KRA) would be happy. But that is the ideal situation. In the real world, not so many Kenyans file their tax returns.
In fact, most do not record what they earn in a fiscal year, mainly because they are in informal employment or work in small businesses with poor record keeping. But it may also be because of erratic earnings or simple disinterest.
Therefore, it is difficult for such individuals to respond to the call by the KRA for them to pay taxes. This situation can be found across many poor countries in the world.
In a case where the majority of the citizens don’t pay formal taxes on their income, it is the job of the taxman to convince them to do so. This is why KRA runs a campaign every year urging Kenyans to pay taxes.
The campaign seeks to convince Kenyans that their taxes pay for government services and public goods – roads, hospitals, schools, police services, markets etc. One can only imagine how KRA manages to persuade more Kenyans to register as taxpayers and duly pay their taxes.
But it was recently reported in the media that KRA would seek to know the sources of wealth of Kenyans who post photos of ‘their’ material possessions on social media.
Kenya’s chief taxman was reported by the Standard newspaper saying, “In the social media, we have some people posting some nice things. You would see some posting nice houses, cars, taking their families to nice places and so on. Here, we are not sleeping, when we see those, we see taxes.”
Well, KRA was suggesting that it was interested in the lifestyles that individuals led compared to the wealth they publicly declared to have or the tax they pay to the state.
So, what did it seek to do to address this situation? Spy on Kenyans online? Or summon them to explain their wealth and prove that they were tax compliant? How would they enforce such measures? Wasn’t KRA likely to end up chasing a wild goose? Does KRA even have the capacity to monitor such online activities?
There is no doubt that people who live beyond their known sources of income should explain how that is possible. Indeed, many individuals can afford to buy property and pay for services that the income they are known to earn would not support.
The so-called celebrities, who seem to have been the primary target of KRAs statement, do sometimes post on social media what they claim to be their material possession and photos of ostentatious consumption. But do they really live such a lifestyle? Can they afford the luxury goods that they pose next to?
It is not surprising that this announcement led to jokes, humor, and satire from Kenyans online.
Kenyans mocked KRA by creating comical skits of the KRA as the unseen eye, watching over any Kenyan who might wish to indulge in any luxury.
For instance, having a soda or a cup of coffee after a meal was depicted as likely to lead to KRA requesting for information one’s earnings that would allow him to drink soda or tea in these economically difficult times.
KRA was painted as nosy, intrusive, and idle.
Why would a government agency whose employees are among the best paid Kenyans wish to troll taxpayers online, chasing after individuals who post images of themselves next to expensive cars (not necessarily theirs), drinking seemingly expensive whisky (most likely contraband), and wearing bling bling (definitely fake)?
Kenyan celebrities would probably be the worst example to use when seeking to audit the lifestyles of individuals who seem to live beyond their means. Most of them are merely ‘showing off’ other people’s cars, houses, or even clothes and jewelry.
Thus, Kenyans weren’t necessarily outraged that KRA wished to check on their tax compliance by doing a lifestyle audit.
Many Kenyans felt humored. They found it incredibly funny that instead of the taxman finding better ways of encouraging or enforcing tax compliance, they would issue what seemed like threats.
Not so many rich people actually flaunt their wealth online. Tax cheats or evaders would not necessarily show off what they possess and how they spend their money. They would most likely not post public photos of themselves on expensive yachts or helicopters; or on expensive beach hotels; or wearing diamond or gold rings.
KRA’s announcement is a case of doing the right thing the wrong way. The number of Kenyans on social media is actually small compared to the whole population. The number of ‘rich’ Kenyans who often show off their wealth in public is quite negligible.
Was this not a missed opportunity by KRA to get Kenyans to debate more on the need for rich Kenyans to pay more taxes?
Couldn’t KRA have used this chance to start a public debate on social media about more effective ways of paying tax for Kenyans who are not in formal employment but who still make good money without paying tax; and also, how Kenyans could track the use of their taxes by the government online?
The writer teaches at the University of Nairobi. Tom.odhiambo@uonbi.ac.ke
