YAOUNDÈ, Cameroon – Kenya’s Catholic bishops have warned that exorbitant tax rates and a consequently high cost of living are threatening the people of the East African country.
The bishops were speaking Friday, November 10 at the end of their plenary assembly that was held at St. Mary’s Pastoral Centre in Nakuru.
“We have appealed to the government on several occasions to reconsider the issue of over-taxation of the Kenyans, and especially to incomes of those in the lower income bracket,” they said in a statement.
“This one factor has greatly affected the family income in a disproportionate way, leading to anger among Kenyans,” the clerics said in their closing statement.
“Many traders and businesses are now faced with the option of closure or laying-off employees due to the immense drain to their resources and added tax burdens,” the bishops said.
The clerics condemned the harassment of business persons by officials of the Kenya Revenue Authority (KRA) to collect more taxes.
“This has also affected peoples’ morale and sense of hope in a better future,” the bishops said.
The bishops complained about the high cost of living, noting that it has disrupted the social fabric of the nation.
“We continue to witness the rise of the cost of fuel, the cost of basic commodities, and the added demands from the care for the family, in school fees and healthcare,” the church leaders said.
“We are particularly concerned that the people who are affected most by this situation are those in the lower income bracket, especially the very poor and miserable.”
They said the exorbitant living cost has created an “added suffering to the people already strained by the recent Covid-19 pandemic and drought effects.”
“It is especially strangling the very poor in their modest needs as families struggle to make ends meet which leads to strained relationships and increased tensions within households.”
They said parents were finding it increasingly harder to provide for their children’s education, healthcare, and overall well-being- a situation which is perpetuating “a cycle of poverty, limiting opportunities for personal and societal growth.”
They said the situation has worsened the country’s unemployment problem, creating “a vicious cycle of financial hardship for the population.”
They called for “a wider consultation and discussions among the Government and other stakeholders, to review and study ways to address and mitigate the effects of the high cost of living.”
“We believe that the greater commitment and assistance in agricultural production, and the better-coordinated sale of products; the fair prices for produce like maize; waiver of certain licenses, and zero-rating farm inputs, can relieve many Kenyans of this burden,” they said.
They partly blamed the war on Ukraine and the Middle East conflicts for the situation, and made the case for “a more strategic approach based on the interest of the very poor” to lessen the pain.
The Kenyan government says the high taxes are needed to pay off the country’s mounting debts. President William Ruto came to power in August 2022 with the promise to improve life for the people of Kenya, and bring down the costs of basic commodities in an economy impacted by the COVID-19 pandemic and price hikes fueled by widespread drought and the Ukraine war.
But a combination of factors including shortfalls in revenue collection, spiraling inflation and a crippling public debt of $74.1 billion, have made it harder for Ruto to meet those challenges.
Popular anger spilled over when Ruto announced not only new taxes, but a generalized hike in existing taxes.
Taxes on petroleum products rose from 8 percent to 16 percent. People earning above $3,500 now have to pay 32.5 percent in income taxes, and those making above $5,300 now pay 35 percent.
In addition, with a new housing tax of 1.5 percent and a medical insurance tax of 2.5 percent, some Kenyans may lose roughly 40 percent of household income to taxes.
Ruto has justified the high taxes on the need to reduce borrowing for a government that has already accumulated debts to the tune of $67 billion, with the World Bank expressing concerns that the country runs a high risk of debt distress.
Speaking on a state of the nation address on November 9, Ruto said it was time for hard decisions to be taken.
“The time has come, therefore, to retire the false comforts and illusory benefits of wasteful expenditure, and counterproductive subsidies on consumption by which we dug ourselves deeper into the hole of avoidable debt,” he said.
“The new direction may not be easy, but it is ethical, responsible, prudent and, most importantly, necessary. We have had to take hard decisions and make painful choices because we owe it to Kenyans to do the right thing and confront facts as they are without flinching or equivocating,” Ruto said.
The president also announced that Kenya will in December this year pay the first installment of a $2 billion Eurobond.
The bishops called on the administration to “find a reasonable balance between the desired income for the government and the minimum protection of the basic needs of the very ordinary Kenyan, and respect to their dignity.”
“Our true patriotism and true leadership, as government, churches, and faiths, can only be measured in the care we have for the most vulnerable in the society,” the bishops said.
“We can rise above all these challenges and continue to build our country.”