Leave the bone marrow alone

It is the tenth anniversary of the Rwanda Revenue Authority (RRA) this year and one cannot help but admire their conjolés.

It is the tenth anniversary of the Rwanda Revenue Authority (RRA) this year and one cannot help but admire their conjolés.

The institution actually had the nerve to plaster their ‘achievements’ all over the place. What are the achievements they were harping about?

A major feat? The authorities ability to collect a couple billion more francs this year than the previous ones. I cannot understand what they were so excited about.

I mean, it is not as if they did anything other sit on their desks and collect peoples hard earned monies - while we poor hard-working taxpayers were bled dry.

Globally in a normally functioning society, taxes are one of those facts of life that you will never be able to avoid, somewhat akin to rain or death. I understand perfectly well that citizens have an obligation to fund the workings of the state.

Though, I argue we taxpayers are not being given a fair deal. Look at our income tax regimes.

I do not make a whole lot of money but I end up paying the same percentage of my salary as rich tycoons in the likes Mr. Tilbert Rujugiro (40%), who, I must say, makes a WHOLE lot more money than I do.

So, here you have a situation where someone who earns just under two hundred dollars has to give forty percent back to the treasury. How in the world do you expect such a person to be able to save or invest?

We are lucky that the cost of living is relatively low but how long will that last? Not very long I would say; food prices are rising, fuel is skyrocketing, astronomically high rentals even in the historically low income neighborhoods like Remera, are the order of the day.

So, we are getting squeezed from both sides. While we earn peanuts after the tax boys have grabbed their hefty chunk that little we take home is absorbed in all the above.

Now that is a crime against humanity!

I think I understand the socio-economic dynamics in this country. Not very many people are even able to pay taxes because of their overwhelming poverty while the state needs revenue to run the country and fund its poverty alleviation program.

I mean hey we do need flushing toilets and smooth roads!
Sadly, we few income-earners must bear the burden of the non-tax paying population.

But here is the question; which sector has the greater chance to alleviate poverty in this country, the public or private? If you say that the state should be the driver then the present tax regime is perfect.

Though if you believe, like me, that the business of growth should be placed in the arms of the private sector then this regime is crippling.

Ugandan president Yoweri Museveni, in the just concluded East African Business Conference, made an interesting analogy. He compared tax collection to blood donation.

A blood donor can donate up to a pint of blood to a blood bank without too much trouble…but if the blood bank, decided to instead take the bone marrow then the prospective donor would be in trouble. For without bone marrow no blood would be produced, the donor is effectively dead.

I think I know what he was trying to say. He was saying that taxes should be formulated in such a way that they do not become so vampire like - fundamentally harming the taxpayer.

I think our tax body has gone further than just vampirism to cannibalism as it harvests both blood and bone marrow. So, instead of being able to do something productive with our incomes we are forced to live from hand to mouth. 

Trust me, hand to mouth survival is not helping anyone. Not us the working class, not even the private sector which depends on our disposable incomes to get by and consequently not even the state is helped by this situation (despite the fact that they are collecting record amounts right now).

Have the tax boys ever asked themselves where the chunk of taxes came from? I think I will be able to give them an answer. The biggest tax payers in this nation are the business concerns i.e. the firms.

These concerns, who provide the bread and butter of the RRA, survive by selling their products to the paying public. Problem is the paying public cannot buy as much as they should because they simply do not have the buying power.

If firms, in turn, do not make as much as they could in profits then they cannot expand because they do not have the money to. The revenue authority however, goes on because it gets its pound of flesh from both parties.
I believe that the tax regime we have gets it all wrong.

Instead of taxing all and sundry I propose the following. Instead of taxing my income let me go scot-free and then later on, tax my inevitable spending.

That way you will help the businessperson (the clients will spend more), the clients (they will be able to buy more than they have been able) and, inescapably, the revenue collectors.

The businessperson will pay more tax because his/her firm is either producing more or importing more and will still get its monies. Leave my little wage alone please.

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