Religious leaders have added their voice to the growing calls for the National Treasury to reconsider some of the tax measures it has proposed in the Finance Bill, which is set to be tabled in Parliament next month.

That union leaders and political leaders had voiced their misgivings with some of the proposals is indicative of the seriousness of the problem given that many workers are either still recovering from the shocks inflicted by the Covid pandemic and last year’s rushed school calendar that saw parents pay fees for four terms instead of the traditional three.

Treasury should also take into account that for the last two years, the cost of living has gone up and this has eroded the value of the shilling and how much this has affected the purchasing power of many households. Again, given that Value Added Tax now applies to virtually all goods and a wide range of services, Kenyans continue to pay this secondary tax at every point of purchase. As such, it is not too much to expect that they need relief, especially from deductions such as the housing levy, which can be rolled forward by a year if not more.

Already, there is a raft of deductions, such as for health insurance and retirement savings that have reduced what workers take home as income at the end of every month. Loading new deductions on these will only weaken their pecuniary position especially because net income is also subject to deductions such as savings and loan repayments.

 There is, therefore, a real danger that some workers will fall below the legal threshold of taking home at least a third of their gross pay, meaning that their quality of life is at risk of being compromised in the short and medium term.  What Treasury needs to do is to create an environment that will make it possible for small businesses to thrive so that even workers can invest in passive income-generating ventures. That way, citizens will be empowered to generate more wealth, which in turn, will increase the revenue base from which the government can draw taxes.

At any rate, citizens hold power and the government ought to heed when they demand a fair tax regime. The government exists to serve the people, not the other way round. As such, it should review some of its priority areas and push forward those that are not mandatory. That also calls for long term strategic planning so that the government does not bite more than it can chew in any given financial year.