By
Tom Odhiambo
Title: FY 2021-2022 The Mwananchi Guide Budget Highlights;
Publisher: Government of Kenya (GOK); Authors: Ministry of Finance, National Treasury and Planning; Publication Date: June 2021; Pages: 12.
The government of Kenya’s estimated budget for the Financial Year 2021/2022 is still very fresh. Keen readers of the budget, the women and men who comb it looking for opportunities to exploit, are still hard at work flipping through the pages.
For the general reader, the summaries offered in the newspapers is the only source of information they have.
However, the law actually anticipates that the government will publicize the budget for all Kenyans to be able to see how the government plans to raise revenues as well as spend it. Why is it important that ordinary citizens know about government revenues and expenditure?
Obviously because they are affected as taxpayers. And taxes form a significant percentage of government revenue, especially in poor countries, such as Kenya.
For instance, according to the estimates for the FY 2021/2022, of the expected revenue of Ksh. 2,038.6 billion, the government plans to raise 40.9% of the amount from Income Tax. Value Added Tax will add another 23.2%; Import Duty 5.8%; Excise Duty 11.8%; and Other Taxes 5.3%.
Yes, taxation will, therefore, eat a huge chunk of any money a Kenyan will earn and or spend!
So, there is this little 12-page insert in today’s (30 June 2021) newspapers, declaring itself as ‘The “Mwananchi” Guide. Guide to what? Guide to a discussion of a budget that has already been read? Guide to how much more painful it is going to be for that mwananchi to pay for the government’s profligacy?
Guide to a debate on the ‘Summary of Proposed Tax Measures?’ Guide to the poor PR on ‘Big Four’ Agenda, which proclaims ‘A Conducive Business Environment for Investment’, and talks about ‘Improving National Security? What is it about ‘improving national security?
Apparently the ‘second mass registration for Huduma number’ – that magic state-issued card that would open doors to all government services – will cost the taxpayer Ksh. 1.0 billion! Remember that the Huduma Number cards are yet to be universally issued, more than a year since millions of Kenyans registered for it.
Undoubtedly the budget-making process should involve all taxpayers, or their representatives. Indeed, sessions are often held in most parts of the country to solicit views about what the local and national budgets should consider as priority areas to fund, as well as to talk about the tax burden for taxpayers.
However, if, for instance, an ordinary Kenyan reads that the government proposed in its estimates that it will spend “Ksh. 670.0 million for Digital Literacy Programme”, also known as the ‘School Laptop Project’, when evidence on the ground shows that most pupils in government schools have hardly seen a laptop, then one wonders if Kenyans shouldn’t really spend more time talking about how the government uses its revenue.
Why should the government of Kenya, which really has little capacity to establish a nuclear reactor set aside “Ksh. 1.3 billion for development of nuclear energy and exploration and mining of coal? Sure enough, coal is a source of energy. But it is dirty energy.
Why would any government that wishes to be a leader in environmental conservation ever imagine spending money on mining coal or even investing it in nuclear energy? Probably the more urgent question is: will these monies really be used for the planned projects?
Shouldn’t Kenyans be worried that this budget runs on a deficit? Which parent would buy her family gifts every day or take them on holiday every month or feed them meat at every meal, when she knows that her salary cannot pay for half of the debts she is incurring?
Why would the government of Kenya run a budget deficit of nearly a third of the budget estimates? Who would run a household budget on debts every day, every week, every month, for a year? It isn’t just feasible. It is morally unacceptable.
But this is exactly what the government of Kenya has planned to do with its budget for the FY 2021/2022. It simply means that in the course of the financial year, the government has to play magic tricks, moving monies from one allocation to the next, in cases where the anticipated borrowing from the local market and funding from donors doesn’t work out.
It also means that Kenyans have been mortgaged not just to foreign funders (creditors) but that they are at the mercy of local banks, on which the government will depend for domestic financing. In such a case, can the government really police these banks?
Why should Kenyans always discuss the estimated government budget? Because although it may appear to be just a government affair, it is quite close to home. In one way or another, all Kenyans will and do pay taxes.
Taxes come in many forms. It could be a charge for applying for a government document. Selling some produce from one’s farm is taxed. More than half the cost of a beer is tax. Part of the cost of that boda boda ride is tax. There is tax everywhere, most of it not differentiating between the rich and the poor.
This is why every Kenyan – or citizen of East Africa – should be concerned when the Minister for Finance carries that little briefcase into parliament, ready to read his or her estimates for the annual budget.
Taxpayer education should not just be an occasional call by the receiver of revenue, exhorting taxpayers to do their civic duty and pay their dues. It should be a continuing process of educating citizens on the how, why, and what of the budget process.
Citizens should learn and understand how budgets are estimated; why these estimates differ from one year to the next, and from one sector to the other; and what are the implications of the estimates for the collectors of revenue, payers of tax and expenditure.
‘The “Mwananchi” Guide from the National Treasury and Planning in its abbreviated form does not really even begin to explain to the ordinary citizens, who will bear the brunt of the government’s extravagant spending based on such a huge budgetary deficit, why they should be interested in why the government expects them to pay taxes and how it uses the collected revenue.
Tom Odhiambo teaches at the University of Nairobi. He can be reached at: tom.odhiambo@uonbi.ac.ke or +254720009155
