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LETTERS: Adopt new ways to raise revenue collection




Every financial year the government sets new revenue collection targets. FILE PHOTO | NMG 

The dawn of every financial year in most countries is characterised by the ceremonial budget reading whose crescendo is setting revenue targets for the revenue collection agency of the land. The targeted revenue is meant to finance the given financial year’s budget.

The case has not been any different for Kenya. Every other financial year, the government sets new revenue targets and in turn throws the ball in the court of the chief government revenue collector, the Kenya Revenue Authority (KRA), to collect the revenue.

At the moment, the country is hoping against hope to finance not only an unprecedented budget but also the most ambitious budget in the whole of the East African budget.

The 2018/2019 budget was prepared in the wake of the projected transformation of the economic landscape as road mapped in the Big Four Agenda.

Over the past years, KRA has been under fierce criticism over its failure to meet revenue targets set in recent financial years. This criticism has been more pronounced among commentators in the local dailies.

As much as the taxman has not been meeting revenue targets, we might need to ask ourselves two key tough questions before we cast aspersions on revenue collection in this country.

First, how many job opportunities do we project to create as a country in a given financial year from which tax in the form of Pay as You Earn (PAYE) can be collected? Secondly, how many measures will we put in place as a country to facilitate creation of new businesses from which revenue in form of VAT and other tax heads is collected?

Recently, the economic landscape of this country has been characterized by massive job cuts in major sectors such as the banking sector.

Major firms have also been on a retrenchment spree, a factor that has affected payroll revenues.

Additionally, major business establishments have been folding up owing to various factors that within the operating environment. As a result, revenue taps from such establishments have been incessantly running dry.

Sadly, nothing notable has been done to remedy the situation yet all eyes are on the taxman to have collected about Sh1.7 trillion come end of June 2019.

While there is still a dire need to collect more revenue to run the country every year, there is equally an urgent need for the government to put in place various strategic measures which will enhance revenue generation from all sectors of the economy.

Otherwise, we will keep on expecting more milk from the very cow we are feeding on the same or less amount of fodder.