Several policies, mostly concerning interventions to address the cost of living through reduction of duties and taxes have negatively affected revenue collection.

When Kenyans complained of high petroleum prices, the government responded through removing excise taxes on kerosene and reduction of excise duty on diesel. When food prices shot up the government responded through reducing duties and taxes on food products such as rice, maize and wheat. When argument was raised that people are dying from drinking illicit brews, the government responded through imposing tax breaks on beer manufacturers to make cheap beer for the class of people who initially could not afford it.

The above measures have negatively affected government revenue and the tax man has been forced to propose alternative taxes to make up for the revenue lost through tax cuts. A good example an example being the proposal to have any Kenyan above 21 years file tax return, the implementation of property tax that would see landlords raise rent to their tenants, and new electronic invoicing that would monitor spending and ensure that none fails to pay taxes.

 So, are tax cuts still a viable solution?

 The method has worked in several countries including Ireland, where government spending is reduced.

Tax cuts reduce government revenues, which in turn creates a budget deficit. To counter this, the government has  to lower its spending but in Kenya this cannot be the case at the moment as the government needs enough financial resources to implement the new constitution and to finance the military project in Somalia.

 So, while we enjoy certain tax cuts, we will definitely have to make up for the budget deficit