304 Billion Reasons To Lose Your Expense Receipts

Dear Mr. Nameless Government Official,

I have 304 billion reasons to write to you today. My friends told me to calm down, that I was making a mountain out of a molehill, getting my knickers in a twist and creating a storm in a teacup. My friends clearly got an A+ in English grammar drama. But I can’t calm down. Not as a long-suffering, taxpaying Kenyan I can’t. You see, Mr. Edward Ouko the Auditor General, sensationally announced last week that there was Kes 304 billion that could not be accounted for out of the 2011/12 Kes 920 billion government expenditure.

I couldn’t blame him for his sense of drama. I mean, it’s only 33% of the total government expenditure right? It is only 9 billion short of Kes 313 billion of income tax collected by Kenya Revenue Authority in the same financial year, right? In other words, the equivalent of 97% of the entire income tax that was collected from tax compliant individuals and organizations in FY 2011/12 has allegedly gone up in smoke. Poof!

Poor chaps over at Kenya Revenue Authority; they hit the tarmac every morning, knocking on doors of companies and undertaking tax audits to ensure that what is Caesar’s is given unto Njiraine. Then some forgetful Joes in government ministries forget to submit their imprest reconciliations, others forget to ask for authorization before spending money, others misallocate their expenditure and others just simply forget themselves. Whatever the case, these absentminded Joes in government very efficiently manage to misappropriate 97% of what the hard working chaps at KRA have collected in income tax. Wow! Talk about singing from the same hymn sheet.

So my dear Nameless Government Official, this is my take of the status quo. You are all one big Government of Kenya family beginning with forgetful Joe and ending with the hardworking KRA chaps. Family forgives family. The KRA chaps essentially have to take one for the team as it would appear that the forgetful Joes over at the ministries fritter all of KRA’s hard work away. In the spirit of sharing, I would like to humbly request that all the innocent, tax compliant individuals and organizations also be given leeway to forget as well. Let’s put a number to this forgetfulness. 304 billion. I will explain. The tax regime allows individuals and organizations to deduct business related expenses against revenue generated in order to arrive at taxable income. If, in the spirit of shared forgetfulness, these individuals and organizations misplace the expense receipts or are unable to allocate the source of such expenditure, they will be standing shoulder to shoulder in inefficiency with the forgetful Joes. They will also save the KRA chaps the trouble of knocking on thousands of office doors to audit or collect tax.

Instead, what these individuals and organizations will do is to sweetly request the KRA chaps to apply their efforts to auditing and collecting the missing funds over at their brothers in the ministries. All Kes 304 billion of it. What are the benefits, you ask? Firstly, the KRA chaps don’t have to spend long, hot and dusty days knocking on thousands of tax compliant doors. They will just criss cross Harambee Avenue and Community Hill which is a smaller area of jurisdiction to do their work. Benefit: less energy used, less wear and tear on leather shoes.

Secondly, less paper will be generated in this beautiful environmentally friendly country of Kenya. Individuals and organizations will not require to print reams of paper for receipts and expenditure reports to justify why they should offset that expenditure against the income that they generated. Benefit: less printer toner used, less wear and tear on the wily brains of accountants. Thirdly, corporates operating within the tax jurisdiction of Kenya will see a significant reduction in their operating expenses under the line “professional services”. This is the line that is charged when expensive tax consultants have to be used to advise on efficient ways to avoid tax such as transfer pricing or use of tax havens for registration of holding companies. These corporates would rather their hard earned funds find refuge in a safer jurisdiction than be frittered away by forgetful Joes who received government allocations that were sourced from income tax. With less expenses generated by the corporates, and no tax paid due to our forgetfulness theory, we will receive higher salaries, better benefits and more mandazis during our tea breaks. We might even achieve the lifestyle of our erstwhile members of parliament. Benefit: inconceivable, these are dreams of my forefathers.

I see your obvious consternation. Don’t fret. Kenyans will not stop paying taxes. Why should they? They receive great service from their government. Their police are the best paid in the world and provide unrivalled protection over the 40 million citizens. Their hospitals are the best equipped with world-class facilities, limitless drugs and phenomenally motivated doctors and nurses. Let’s not even talk about the deliriously happy teachers. Kenyans love that their hard-earned tax shillings are put to efficient use and are accounted for down to the last cent. Kenyans love that they now pay more to get by in their daily lives because the VAT bracket was widened. Kenyans know that even those VAT funds will be put to excellent use and nary a shilling will ever be “lost”.

No, Mr. Nameless Government Official: Kenyans will roll over and play dead. They will pretend that the Auditor General was suffering from a trifling spot of something and must have been delusional with dengue fever when he made his sensational claims. They will accept that your colleagues over at the named ministries are not inefficient. They are just forgetful, 306 billion kilowatts of forgetfulness. My friends have told me not to complain. Kes 304 billion can possibly shut down an economy like ours if it goes missing. It’s not missing though, you say. It’s just misplaced. In someone else’s pocket.

Yours faithfully,
A Forgetful Citizen.

Twitter: @carolmusyoka

  • Odhiambo

    The worst bit is that we can do nothing about it. Can we?