Tax is cash you pay the federal government for the rendering of public services and products.  Only recently, President William Ruto declared his goal to extend tax income by means of sh.500 billion by means of June this 12 months. For a mean Kenyan citizen, this isn’t one thing they’d like to listen to. No person likes paying taxes. But, paying tax has been the norm since time immemorial. We pay taxes as it’s our method of paying for public services and products the federal government provides the electorate of a rustic. For instance, public healthcare, public schooling, infrastructure, and so on.

To suppose that your tax cash isn’t being spent accurately and you can not see the place it is going is sufficient to provide you with qualms. Particularly if it’s all about black budgets and politicians giving themselves raises. But additionally,  that is nearly inevitable. Regardless of how environment friendly a tax device is, anyone is all the time going to be unsatisfied. Paying taxes is a central authority mandate. On this article, we will know about what taxes are, why we want to pay our taxes and the professionals and cons of paying taxes to us and the total affect on society.

How Do Taxes Paintings?

In Kenya, or any given nation, there are public services and products. This comprises public schooling, regulation enforcement, healthcare, schooling and so on. Those services and products ceaselessly want investment and the individuals who paintings in those organisations additionally should be paid. As electorate, we pay for those services and products not directly with taxes. There are various kinds of tax with explicit rules for every.

For a given kind, tax is levied on source of revenue whilst others are oblique like Price Added Tax (VAT). The tax device is designed in the sort of method that makes everybody pay their fair proportion of taxes. So at the cash you’re taking house, there’s a undeniable share you will have to pay in taxes. For me, I ceaselessly like to think about tax as a carrier price charge for dwelling in a rustic. The Kenya Income Authority (KRA) is accountable for amassing and accounting for tax income in Kenya.

5 Causes Why We Pay Tax

Paying taxes is a duty for each and every citizen of a rustic. So why will we want to pay our taxes? Listed below are some explanation why you will have to all the time dossier your taxes once a year.

  1. Taxes carry cash for presidency services and products and tasks. The federal government has many tasks that it needs to perform for the expansion of the rustic.  A few of these tasks come with infrastructural building like construction roads, faculties, hospitals and so on and likewise fund public services and products. For this to be conceivable, it wishes us to fund this thru tax. Therefore, we necessarily construct a greater society to are living in with our taxes.
  1. Redistribution of wealth in a society. Thru tax, the federal government can decrease the divide between higher source of revenue earners and decrease source of revenue earners. That is completed by means of imposing the development tax device. Right here, higher source of revenue earners pay upper taxes in comparison to low source of revenue earners. On this method, everybody will get to relatively pull their weight of the commercial prerequisites of the rustic. 
  1. To advertise the smartly being of society. A part of your tax cash is going to social and welfare techniques like meals and vitamin techniques and public well being methods. Whilst you pay your taxes, you give a contribution in opposition to the overall smartly being of the society.
  1. It’s your accountability to pay tax as a citizen. Taxes are involuntary fees we need to pay to the federal government as required by means of regulation. As a result of we don’t love to pay taxes, we have a tendency to evade them. That is punishable by means of regulation. It’s your legal responsibility as a citizen of a rustic to post your taxes from any cash you’re taking house. This guarantees equity and fairness on the subject of sharing your burden on financial enlargement.
  1. Thru tax, we get to construct, handle and beef up infrastructure. This comprises faculties, hospitals, public libraries, regulation enforcement companies and so on.

What are the Benefits of Paying Tax?

Listed below are one of the vital advantages of paying your taxes:

  1. Taxes fund schooling. As of 2023, about 7 million adults in Kenya are illiterate. That is fairly alarming as a result of we rely on literacy for nationwide building and fulfilment of a person’s objectives. Once we pay taxes, we give a contribution in opposition to giving schooling alternatives to underprivileged communities and bridging the training hole.
  1. Investment healthcare methods. Cash that is going in opposition to construction hospitals, scientific analysis, medical insurance and so on come from our taxes.
  1. Salaries and pensions for presidency workers shape tax. Staff who paintings in executive places of work are not directly paid by means of us with our tax cash.
  1. Investment regulation enforcement. The federal government makes use of the income earned from tax to supply coaching, purchase apparatus and beef up the infrastructure of our defence forces, together with the police, air and sea patrol, customs and excise and paramilitary forces. When that is completed, safety of the rustic’s borders is ensured.
  1. Having a competent report. Paying your taxes implies that the federal government has no trade coming after you for failure of submitting your tax returns.

What are the Disadvantages of Paying Tax?

Listed below are the issues and demanding situations that incorporates paying your taxes:

  1. You might have much less cash to spend. When a undeniable share is taxed at the source of revenue you might be receiving, you might be left with much less cash to spend on shopper merchandise. Consequently, the nationwide GDP enlargement price decreases as a result of low intake.
  1. Taxes might discourage folks from running exhausting. Human beings paintings on a praise device. We get motivated when the returns are assured. If it’s a must to pay top taxes for the top source of revenue you might be incomes, you will be demotivated from running exhausting as a result of an enormous portion of your source of revenue is inevitably going to be deducted for tax functions.
  1. Tax schemes could also be regarded as unfair. There are all the time questions and reviews primarily based round who will have to pay extra taxes and who will have to be exempted from paying tax. Even though a tax device is honest, there’ll all the time be anyone who isn’t content material with the tax code a rustic makes use of.
  1. Investments would possibly endure. Some folks pay top taxes and are left with much less cash to position in opposition to investments and securing their monetary long run whilst assembly their day by day wishes.
  1. Some folks and massive firms ceaselessly attempt to keep away from paying taxes. Rich folks and massive firms will attempt to in finding loopholes and create a company construction that provides them a leeway to keep away from taxes. This can be a drawback as a result of different source of revenue earners are left with the weight of paying heavy taxes, whilst they don’t give a contribution anything else in any respect. 
  1. Cash could also be spent in an useless means. We don’t like paying taxes as a result of we don’t get what we understand as price for our cash. That is very true if you can not see any development at the state roads, public faculties, hospitals and so on and politicians act opportunistically with our tax cash.


For anyone to be a taxpayer, there are particular exceptions, rules and {qualifications} that will have to be regarded as for who the kind of tax relates to. In Kenya, more often than not of thumb, any person who is eighteen years of age and has strong source of revenue is obligated to pay taxes to the federal government. It’s subsequently necessary to know what taxes are, how the tax device works, how taxes are calculated, why taxes paintings another way and put in combination a tax plan that works for you.

You probably have this information, you’ll be able to be informed guidelines and tips on keep away from paying taxes legally and overally having the tax device paintings to your excellent. Taxes are the primary income for the federal government. They’re amassed for explicit functions, therefore the various kinds of tax. We will be having a look at these kind of tax, tax making plans and dossier your taxes as we stay progressing within the box of private finance.


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