2% Swallow 50% Tax Revenue!

Kenya spends half its tax take on civil servants!

(Says Uhuru Kenyatta – the man in-charge for the last 4 years)

 Kenya’s civil servants enjoy a privileged position, receiving much higher incomes than in other similar countries.

Speaking in his annual state of the nation speech last week, Kenya’s president, Uhuru Kenyatta, was complaining that civil servants are paid too much and eat up too much of the country’s tax revenue which, he said, might be better spent elsewhere.

He said that Kenya’s 700,000 public servants, who represent less than 2% of the country’s 46 million citizens, were paid 627bn Kenyan shillings ($6bn; £4.9bn) in 2015/16, a figure also cited by the Salary and Remuneration Commission which oversees public sector pay.

Kenya’s tax revenue for that year was Ksh1.3tn ($12bn, £10bn) according to Kenya’s Treasury department which provides Kenyatta with his 50% figure, (although the accurate figure is 48%).

By comparison, the average proportion of tax revenue spent on public sector wages in sub-Saharan Africa was 29% in 2012, according to a World Bank analysis. That is nearly twice that paid by OECD countries where the average is 15%. In the UK, public sector staff costs make up 18% of tax revenue, including national insurance, according to the Office of National Statistics.

President Kenyatta was elected four years ago on a platform to root out corruption and shake up the country’s economy. His efforts have been praised by the World Bank which described Kenya’s economy as “one of the bright spots in sub-Saharan Africa”.

However, his fight to reduce the ballooning public sector wage bill has seen several bruising fights with doctors and other civil servants. Doctors recently ended a 100-day strike after demanding higher pay while in 2015, the Supreme Court ordered the government to give teachers a 50% pay rise. Uhuru himself is to get a 10% pay rise from July.

Besides the controversies around pay in the public sector, the gap between the highest and lowest pay has also been a bone of contention. A report found that the best paid civil servants earn almost 100 times more than the lowest earners.

Source: BBC, 20 March 2017