Open up debate of tax policy to public

(East African Standard)
The arrival of the Kenya Revenue Authority's annual Taxpayers' Week should be seen as an opportunity to mend fences with taxpayers, even as the institution pats itself on the back for a job well done. It should also be an opportunity to reopen debate on whether current tax policy addresses issues of equity and distribution adequately.
A great deal has been achieved in the last few years with regard to broadening the tax base and ensuring those who have previously evaded taxes pay up. However, this hasn't always been done with sensitivity to taxpayers.
As we have urged in these pages before, a softly-softly approach is no less likely to work and will go a long way to enlisting the cooperation of taxpayers.
To keep up economic growth, the State requires sufficient revenue to fund the physical and social infrastructure.
The revenue also enables a degree of wealth distribution in order to promote equity and security.
Tax collection has steadily grown by an average of 13 per cent increasing from Sh200 billion in 2003 to approximately Sh375 billion in 2006. KRA plans to raise Sh425 billion this financial year in revenue collections. This will be Sh65 billion more than last year and about Sh127 billion more than the year before.
The remarkable improvement in revenue collection is probably one of the few undisputed achievements of the current Government.
It has seen the financing of development programmes from domestic financial resources go up to 95 per cent of the national budget.
This is indeed high compared to our neighbours Uganda, for instance, where only 55 per cent of the budget is financed domestically.
The unprecedented growth has also enabled the Government to substantially reduce dependence on assistance for both recurrent and development expenditure.
While this independence from donors is laudable, it also raises a number of issues that require discussion.
As organisations such as the Tax Justice Network for Africa have suggested before, the public would greatly benefit from debating issues such as:
How has the increase impacted on the poor households? Who is carrying the tax burden resulting from this increased revenue collection? How adequately have issues of equity and distribution been addressed in the current tax system?