EDITORIAL: Tread carefully on State services fee bid

Kenya is arguably one of the economies in the world where citizens and business entities have to bear the heaviest tax burdens every fiscal year.

One of the reasons for this is because of a public finance policy that tends to narrow the tax base by focusing collection efforts on income and consumption trends while largely ignoring non-conventional revenue streams.

The truth, however, is that experts and empirical evidence hardly ever encourage the higher fees for public services as a way the State can fix its weak revenue position.

That’s why we find it appalling that the Treasury thinks it can plug the national collection gap by raising fees charged on government services.

Granted, public finance experts often like to draw a line between taxes and fees by regarding the former as a non-quid pro quo payment while the latter is seen as a direct charge for specific State services.

The bottom line, however, is that both levies are imposed for the purpose of defraying the expenses of the government. In that sense, therefore, asking citizens to pay high fees so as to access public services amounts to a bad form of double taxation.

It sounds logical when the Treasury argues that fees paid for government services ought to be adjusted to inflation every year.

But that reasoning loses its lustre the moment one considers that the services on offer include access to land title deeds, certificates of good conduct from the police, passport fees or work permit fees, certificates for death, birth and marriage or business registration charges.

Instead, we have seen cases where decision to scrap fees for services such as immunisation, land searches, P3 forms and primary school tuition has worked well for majority of Kenyans, especially those in the lower income brackets.

In short, the State needs to tread carefully with its plan to double revenue collection from what it calls non-tax revenues so as not to isolate a large segment of its citizens.

Instead, the State should focus more on growing the size of the national cake while at the same time adopting conducive policies for trade and investments.