Taxation: MPs, Judges Have Got It All Wrong

Published on 14th November 2008

Is It a Tax Evation Mode
"'In this world nothing can be said to be certain, except death and taxes." Benjamin Franklin, 1789.

Parliament is supposed to be the embodiment of the sovereign will of the people and the personification of their collective legislative wisdom. Whereas there is a general consensus amongst ordinary people that everybody, including Members of Parliament and other Constitutional office holders should pay tax, our MPs and Judges of the High Court think otherwise. MPs have chosen to arm-twist the Minister of Finance into dropping proposals to tax their hefty salaries and allowances while Judges have sought presidential intervention to prevent the taxman from “pinching” their purses. These actions by MPs and Justices are contradictory to the collective desire of the citizenry and incompatible with modern theories on public finance and tax revenue administration.

Taxation is premised on the exercise of sovereign legislative authority. Elected representatives lay down the general policy and legal framework for taxation in all democratic societies in line with the celebrated maxim of “no taxation without representation”. They also provide a general guide on the tariff rates to be charged against each tax head. Judges interpret the law and resolve disputes that arise between the citizens and government over the imposition of taxes, duties, levies or the grant of subsidies. Members of Parliament and Judges should therefore lead the way in paying income tax if they expect ordinary citizens to voluntarily comply with the law.

Paying taxes is the highest form of corporate social responsibility for any citizen; corporate or otherwise. Taxes are levied for the common good of the society. Since time immemorial, nation states have levied and collected taxes to finance public expenditure and provide services such as security, education, health and infrastructure. Modern states still use Oliver Wendell’s old adage that “taxation is the cost of civilization” to justify personal income and corporate tax.

Some pundits argue that the MPs’ action amounts to Parliamentary dictatorship. This is logically absurd since our MPs were elected through a democratic process. The actions by MPs and Judges amount to a gross abuse of legislative and judicial privilege respectively. MPs and Judges are sending a message that they cannot be trusted vanguards of our political sovereignty, economic freedom, equality and justice. They are providing ammunition to tax evaders who are likely to rationalize tax fraud by citing the examples set by MPs and Judges. Reduced voluntary compliance with taxation laws will ultimately affect the government’s ability to finance its obligations, lead to domestic borrowing and soar up interest rates which will in turn diminish the borrowing power of ordinary people and businesses resulting in reduced capital investments and meager economic growth.

Uniform application of taxation laws is intended to spread wealth and create a more just and equitable society. Members of the 10th Parliament and Judges are however telling Kenyans that it is okay for 300 individuals to live in abundant opulence sustained by already overburdened taxpayers while the majority of the citizenry wallow in abject poverty. Their actions demonstrate a collective determination to preserve and entrench a politico-economic system that promotes social inequality and injustice. This is immoral and unacceptable in a civilized society. MPs and judges should pay tax, period!

Capt. (Rtd) Collins Wanderi, LL.B (Hons), PGD (HRM), CPS (K), Certified Fraud Examiner (CFE), Advocate, Commissioner for Oaths, & Notary Public.



 


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