Taxpayer, you’re footing all the bills all by yourself

I feel I need to write something this Sunday that some of you may dismiss as a statement of the bleeding obvious. But here goes anyway.

A government’s only real source of revenue is taxpayers.

That’s it. I said it would be obvious. Yet it needs restating nonetheless, for I fear in the modern economy in general, and in Kenya in particular, people are forgetting this basic fact of life.

Governments don’t really engage in income-generating activities, and when they do they’re not usually very good at them. Governments over the sweep of history have had to abandon their attempts to be income-generating. Of course, government still tries to have stakes in some critical sectors – but the hand of government is rarely a steady one when it comes to efficiency and profit-generation. Witness the performance of our myriad parastatals to see this.

No, the only sustainable revenue engine available to most governments is taxation. This involves taking away a proportion of the income generated by the true actors in the economy – productive individuals and productive companies. The money so collected pays for roads, security, defence, law and order, basic health and education, etc. All good things when the money is spent carefully.

When governments spend (or lose) more than they collect in revenue, they are forced to either create debt (in which case the funding is passed on to future taxpayers who will foot the bill someday); or take money in grants from foreign governments or aid agencies (in which case the money is taken from foreign taxpayers).

Here’s the point. In Kenya, there are precious few taxpayers. Of our 40 million population, only a couple of million or so pay any income tax (those in ‘formal’ employment). Only a relatively small set of businesses pay the corporation taxes and other duties so necessary to sustain government.

Given that such a small group of valiant people sustain the huge machine called government, I am flabbergasted by how little concern there is for what is actually done with the money. If you’re a taxpayer, know first that you’re in a small minority. Know second that nearly all the infrastructure, salaries and public activity you see around you is paid for by you, out of your earnings (or those of your children in future).

So when money goes missing, or ends up in a few pockets, that is not money that appeared from Mars. It came from what you the taxpayer earned from your sweat. Treasury has no mysterious hidden cache of funds: “mali ya serikali” is only your own money in disguise.

When bigwigs enrich themselves through procurement scams, they are dipping into your pocket, not the “public purse.” When they gorge themselves on illicit takings, that is money taken from the futures of your children. When Treasury steps in to “refund” money lost by government, it is you stepping in to fund criminals. When donor money is returned, it is poor Kenyan taxpayers refunding rich foreign ones for something they never saw the benefit of.

When civil servants are lax in guarding government funds, it is your money they are allowing to be stolen. When roads, ferries, cranes and helicopters are sub-standard, it is your shillings being misspent. When some people successfully evade tax, you and/or your children will end up paying on their behalf.

We don’t take all this seriously because we don’t “see” the money leaving our pockets. But if a minister came to your house every day and took some notes out of your wallet, you’d want to follow him to see what he does with the money. It is high time ordinary tax-paying Kenyans woke up to the fact that all the public activity they see, as well as all the scams, are paid for by them.

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