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Six Constitution Laws on Taxation! 45% National & County Revenue Division Debate!
“Only a referendum will make the administration come to terms with the reality that devolution is unstoppable. Either devolve 45% of revenue collected or be thrown out in 2017,” posts Kerbala. Today there is little debate as relates to the six taxing laws that are the source of revenue as created by the constitution as follows: 209. (1) Only the national government may impose—(a) income tax; (b) value-added tax; (c) customs duties and other duties on import and export goods; and (d) excise tax. (3) A county may impose— (a) property rates; (b) entertainment taxes.
1. Income Tax: This is the tax that results from any income. Salary Income, Profit, Property Income, dividends income and capital gains income are all classified as income. This is the biggest source of revenue for the Government.
2. Value-Added Tax (VAT): Every time one buys products or services in the production line they are supposed to charge VAT. The difference between the VAT paid and the VAT charged is the VAT.
3. Customs Duties and other Duties on import and export goods; This is the tax imposed on the export and import of goods and paid at port of export or import.
4. Excise tax: This is the tax imposed on the consumption of goods. For example in the sale of a bottle of beer the excise tax could be put as Kshs 5. The tax is paid when consumption happens and is a consumption tax.
The above four are imposed by the National Government and once collected the county is supposed to get a minimum of 15%.
5. Property rate: This is the a tax imposed by the county government on registered property in a county. Property could be land, house or vehicle.
6. Entertainment Tax: This is a tax imposed by the county on entertainment consumption goods like beer, cigarettes, hotel rooms and anything that is considered as an entertainment and not a necessity.
With good legislation a county can be able to increase the amount it needs for its budget without having to rely on the National government. For example if all counties imposed property rates on all property to collect say $400 billion this would reduce the Income tax for property rate is normally deducted first in the production system.
The 15% is not the problem the failure to enact bills on property rate is the cause of the lack of development funds in the county. 10 out of the 14 functions given to county are directly related to land productivity and transportation of products produced as follows:
- 1. Agriculture, including— (a) crop and animal husbandry; (b) livestock sale yards; (c) county abattoirs; (d) plant and animal disease control; and (e) fisheries.
- 2. County health services, including, in particular—(f) cemeteries, funeral parlours and crematoria; and (g) refuse removal, refuse dumps and solid waste disposal.
- 3. Control of air pollution, noise pollution, other public nuisances and outdoor advertising.
- 4. Cultural activities, public entertainment and public amenities, including— (a) betting, casinos and other forms of gambling; (b) racing; (c) liquor licensing; (d) cinemas; (e) video shows and hiring; (f) libraries; (g) museums; (h) sports and cultural activities and facilities; and (i) county parks, beaches and recreation facilities.
- 5. County transport, including— (a) county roads; (b) street lighting; (c) traffic and parking; (d) public road transport; and (e) ferries and harbours, excluding the regulation of international and national shipping and matters related thereto.
- 6. Animal control and welfare, including—(a) licensing of dogs; and (b) facilities for the accommodation, care and burial of animals.
- 8. County planning and development, including— (a) statistics; (b) land survey and mapping; (c) boundaries and fencing; (d) housing; and (e) electricity and gas reticulation and energy regulation.
- 10. Implementation of specific national government policies on natural resources and environmental conservation, including— (a) soil and water conservation; and (b) forestry.
- 11. County public works and services, including— (a) storm water management systems in built-up areas; and (b) water and sanitation services.
- 12. Fire fighting services and disaster management.