With COVID-19, Revenue Even More Precious.

BLOG 21/05/2020

Tax is a compulsory financial charge or some other type of levy imposed upon a taxpayer (worker’s income, business profits etc) by governments to fund various public expenditures. Taxes consist of direct or indirect taxes and are paid in money or as its labour equivalent. The first known taxation took place in Ancient Egypt around 3000–2800 BC. From this history, taxation qualifies to be one of the oldest disciplines in the history of humankind. This shows that it has been an inseparable aspect in the life of humankind.

In Kenya, taxation has played a major role in defining the national development leading to a more stable economic development. For effective tax administration, there must be an agency that is exclusively dedicated to that course. In our country, the mandate rests with the Kenya Revenue Authority (KRA).

The list of benefits of revenue collected from taxes, in any sovereign country, cannot be exhausted in a single sitting. The benefits are so extensive that we sometimes forget or take for granted some of the amenities funded through taxpayers’ money. This pandemic has shown that the provision of health care is and should be among the top list of amenities funded by revenue collected through tax payment. This includes payment of health care service providers and purchase of medicines, among other aspects that constitute the sector.

The funding of good infrastructural projects such as roads, bridges, hospitals, security services and schools we see around relies heavily on the revenue collected in form of taxes. Thanks to the patriotic and compliant taxpayers who duly remit their taxes, basic education is now free in Kenya. The provision of these public goods and services is still imperative even in the midst of the COVID-19 pandemic. This indicates the critical nature of the KRA operations even with the ongoing crisis.

Further, services such as healthcare are likely to experience a strain and thus require additional resources which the Government will be required to provide.  To this end, KRA needs to continue mobilizing revenue through collection of taxes to ensure the Government has adequate resources to manage the current crisis.

 

By Joyce Ogada

Tax Education, Kenya Revenue Authority.

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