What is the tax burden like in a “poor” country? Some insight is given in a recent article by Mutuma Mathiu, managing editor of Kenya’s Sunday Nation. Around a third of the writer’s salary is payable in income tax. There is a 16% value added tax on goods and services purchased, and there are numerous other taxes, so that the total taxation burden is estimated at two-thirds of the salary. It is clear that the poverty in the country is not due to undertaxing of typical wage-earners.
Rather, the problems arise as a result of the manner in which the government spends the money it gets, and this in turn seems to be attributable to the prevailing notion of the nature and purpose of a government. The popular expectation of a person elected to government seems to be that he or she now has access to the “money”, and should now exert maximum efforts to distribute the “money” to his or her constituents – primarily self, family, and close friends and family. It may be necessary to engage in political bargaining which allows other people access to the “money” in order to secure your own stake. The idea of government for the benefit of all the people seems to be a secondary consideration.
In order to solve the recent political crisis brought about by the rigging of the recent elections, the government has expanded its cabinet, bringing in more ministers so that more people have access to the “money”, keeping everybody happy. Unfortunately however the amount of money in the pot is limited, so that the proportion of government funds spent on providng services for the whole community will have to be reduced significantly, and poverty will increase.