I saw some statistics that were published by KRA going around reporting that only 3% of Kenyans make more than 100k per month. This data is pretty damning.
However, I don’t believe this data because things seem different on the ground. The percentage of people who pay taxes in Kenya is definitely smaller than that of those who do.
Case in point: more than 80% of Kenyans work in the informal sector and so it’s difficult to track how much they make because their income goes unreported. In fact, the only tax they pay is while getting the licenses to start/operate their businesses alafu from there wanaingia Karura forest.
There must be a lot more people that not only make100k but more than a few millions monthly. How else do guys explain the recent real estate boom? How are people buying off plan apartments for millions? How are people building mega maisonettes in Kitengela by the daily? Who is buying all those 100M+ plots in the leafy suburbs of Kenya? By far, construction seems to be the most thriving economic sector and we all know how expensive it is. Yet, high rise buildings are springing up by the daily.
Even if we factored in wash wash / corruption money, we still wouldn’t account for all the property transactions that are taking place. The percentage of corrupt people with access to mega-money is very small (only top gov’t officials and some tenderpreneurs) and every other person is only able to get small amounts in kickbacks which is not enough to finance some of the projects going on in the republic. There’s no way you can convince me that the few corrupt bigwigs are the only ones partaking in the real estate feast. This means that there’s plenty of clean money (big money) from the informal sectors of the economy that goes unreported.
I also don’t think that the influx of foreigners could be the answer as there are only few foreigners in Kenya who by and large aren’t here to stay permanently. We know some of them have packed suitcases in their basements ready to leave at any whiff of political upheaval.
Diasporians pour in billions very year. This is why we need a Govt Dept to look after our needs…also kuna pesa mingi sana exchanging hands online. Watu kuuziana vitu on Instagram and FB. Pesa mingi sana.
No one can convince me ati Kenyans are very broke…after spending a few months hap Rwaka…those supermarkets are busy 24/7…and the roadside market.
Lets dutifully pay our taxes as law abiding citizens. JSKSLL will utilize those taxes for development. The employed masses have a duty to shoulder the tax burden for their suffering unemployed brothers. Lets be our brothers keeper
Income tax should now be abolished tubaki na consumption tax pekee. It is foolhardy to increase consumption taxes in an economy where incomes are stagnating or even declining. It is a fool’s errand. Someone remind me again; why do we have excise duty on items we don’t manufacture?
Nairobi county spends over 1 billion monthly on salaries. Pastors and Churches take 10% of that as tithes and more through offerings. Pastors and churches don’t pay taxes.
These remittances are mostly untaxed. Let’s look at a simple scenario:
X in America sends money to his mother in Kenya via Sendwave. What happens is that, Sendwave charges X a small fee for the transaction. Sendwave then files taxes in the jurisdiction they operate from. Mpesa (which is the most common transaction intermediary) then deducts the the withdrawal fees from the mother (final recipient) and files its taxes as a company owned by Safaricom. That’s it!
In developed countries, the mother would then have to file tax returns at the end of the year on these remittances which would fall under the “gifts” category. Usually, there’s a threshold that you need to hit first before you start owing taxes on gifts. Since diaspora remittances exceed billions every year (for the past 30 years), this threshold is always met. However, filing tax returns is not a common practice in Kenya. In short, GOK has been losing millions of dollars in transactions from these diaspora remittances. The only people that win are the sender (who enjoys the amazing $$ to KESH exchange rate), the company facilitating such a transaction (they charge fees for every transaction) and the recipient who ends up paying 0 in taxes.
If I were president today, I would start by increasing tax revenue by 500% not by increasing the amount paid by Kenyans in individual taxes BUT by making sure every Tom, Dick and Harry pays their taxes annually on all income.
Agreed! It’s possible to increase tax revenue by over 500%. There’s so much in unpaid taxes in the economy dating back 50 years. If all tax revenue was collected properly, we wouldn’t require huge amounts in foreign aid. Lakini watu watasema ati ni ukora. A low IQ populace has zero understanding of why taxation is important.
I highly disagree. What the gov’t needs to do is actually the opposite. If you look at Kenya’s economy, you’ll realize that so many sectors of the economy are not taxed as much as they should (or even at all) and are therefore not contributing to the national kitty (taxes are how gov’ts make money).
A few off the top of my head:
Land purchase transactions
Land ownership transactions: this would immediately correct the real estate trouble we currently have and officially resolve all land issues. Anyone owing thousands of acres of land would now suddenly have to give it up / sell because they wouldn’t afford to pay taxes on said property. The overpriced land in most of Nairobi would become affordable to most middle class Kenyans.
Start taxing the Diaspora money and no one will send any more money to kenya. Those guys already paid income taxes on the money they send to kenya. Why double tax them. Diaspora money imesaidiai wakenya wengi esp wenye hawako job. They send money to their parents and siblings wenye wako mashinani bila kazi. Diaspora people play a good role in the economy. One time i was in Jamaica…hawakuwa na mobile money kama kenya so you have to rely on the money gram and western union shops…zile line zilikuwa hizo places wacha tu… most locals depend on hand outs who went to US. Jamaica ni kama kenya hakuna kazi huko
I think you misunderstood my comment. I’m not saying tax the guy in NYC sending money. That guy has already been taxed by the city of NYC as well as the state of NY!! The people that need to get taxed are the recipients of the money via tax filing at the end of every tax year. This is side-income (gifts in tax terms) and as such, should be reported and taxed every fiscal year. Taxation doesn’t mean “the gov’t is taking ALL your money”. It means a certain percentage of your income (even in the form of gifts, inheritance, grants, endowments etc) is TAXED. This is a system that has been implemented the world over and that’s why developed countries are able to fund social security, health care and other public programs.
It’s insane that Kenyans want better services but are reluctant to pay taxes. Even local mpesa transactions should be taxed! However, Kenyans will start saying “oh, this is theft….oh corruption” when literally that’s the practice the world over. In the USA where I live for example, peer to peer transactions on services such as Venmo, cashapp etc MUST be declared and charged accordingly every tax year.
How else do Kenyans expect the gov’t to sustain the economy? Borrowing like the country always does? There’s a reason Kenya is stuck in the Middle Ages because there’s literally zero financial literacy on the part of the populace who only studied why blue litmus paper turns red.
The gov’t needs to make money. Currently, there’s a huge tax loophole that is yet to be closed. If all tax is collected, Kenya wouldn’t need to borrow so much every time. However, the gov’t knows that introducing such tax measures would result to protests because Kenyans have very little understanding of how an economy works. The same Kenyan who refuses to pay taxes on land ownership is the same one who religiously files taxes when he moves to a western country.
I gerrit it but its still your meney being taxed twice bro. You sent the money as a gift not as salary to your parents. Unless they cap it off like you said. I would not have a problem if am paying tax na hiyo tax inafanya kazi. Why should i pay taxes only for someone to steal it?
Remittances shouldn’t be taxed. Try getting money from abroad through our banks ndo utajua. Hio pesa inakuanga imekatwa transaction fee and charged exorbitant currency rates. If anything, free remittances should be encouraged ndio dollar iwache kua scarce.
Another thing is that instead of overtaxing, why can’t the government outrightly fight corruption and curb wastage. Politicians wameiba hadi 50M ni pocket money kwao. That money ingekua Inalipa watu employed nao wanalipa tax and everyone is happy. Sahii tunaongea some politicians are paying 100k ya Rosecoco… Hio pesa hailipiwi tax na ni ya corruption. So much wastage and corruption. At this rate they are not supposed to be collecting any tax if they can’t account for the money that’s already collected…
I don’t think there’s anything I can say to convince you that GIFTS SHOULD BE and are taxable. Can’t compress a whole class on Taxation into one single thread on Kenya talk. Yes, gifts are taxable. It’s hard to teach people why this is the case.
There is a good reason I don’t engage or argue with semi literate folks like you. One of the canons of taxation is economy. You cannot drive the economy underground into jua kali then line up to collect taxes. Utachukua loan kufuata watu. Can you imagine the logistics and cost of following a mutura guy ama msee wa kuchoma mahindi alipe tax?
Why are you making the assumption that ukiweka taxes kwa remittances bado watu wataendelea kutuma pesa vile wamekuwa wakituma?