Tax and Development: Solving Kenya�s Fiscal Crisis through Human Rights
340 Pages
English
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Tax and Development: Solving Kenya�s Fiscal Crisis through Human Rights

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340 Pages
English

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Taxation is perceived by citizens as a compulsory contribution to the state yet, the legitimacy of the state rests on the publics� acceptance of the state�s right to levy tax and redistribute it in such a manner as to promote the overall good of society. The modern developing state can be said to be facing a crisis of fiscal legitimacy, afflicted by poor governance, poor societal participation, corruption and a lack of accountability. This book investigates whether a possible remedy in averting the fiscal crisis is firstly, to re-establish a link between taxation and government expenditure in the developing state and to utilise human rights law, principles and policies to link tax revenue to expenditure through re-distribution. This thesis will consider whether human rights may be the tool or vehicle for citizens to assess fiscal allocations It analyses developing countries with reference to Brazil and India and more specifically Kenya.

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Published 29 December 2013
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EAN13 9789966031488
Language English
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TAX& DEVELOPMENT S K ’ F C OLVING ENYA S ISCAL RISIS H R : THROUGH UMAN IGHTS A Case Study of Kenya’s Constituency Development Fund
TAX& DEVELOPMENT S K ’ F C OLVING ENYA S ISCAL RISIS THROUGHHUMANRIGHTS: A Case Study of Kenya’s Constituency Development Fund
Attiya Waris
Published by: LawAfrica Publishing (K) Ltd. rd Top Plaza, 3 Floor Kindaruma Road, (Off Ngong Road) P.O. Box 4260-00100 GPO Nairobi, Kenya Wireless: +254 20 249 5067 Cell: +254 708 898 189 Fax: +254 20 249 5067
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© Attiya Waris 2013;LawAfrica
ISBN 9966-031-00-6
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T C ABLE OF ONTENTS
Page Dedication............................................................................. xi Acknowledgement................................................................. xiii Abbreviations......................................................................... xv Foreword ............................................................................... xix Preface .................................................................................. xxi
Chapter 1: Introduction.....................................................
1.1 Re-legitimating the Fiscal State through Realising Human Rights................................................................ 1.2 Linking Taxation and Human Rights in Developing States through the Lens of Fiscal Sociology ..................... 1.3 Defining Fiscal Sociology for the Developing State ......... 1.3.1.The Macro Level of Fiscal Sociology...................... 1.3.2.The Micro Level Context ......................................
PART1: LEGITIMISINGTHEPOSTCOLONIALSTATE
1
3
8 9 11 14
Chapter 2: Legitimising the Post-Colonial Fiscal State through Fiscal Sociology.................................. 19
2.1 Conceptualising Fiscal Legitimacy for the Post-Colonial State .............................................................................. 23 2.2 Conceptualising Fiscal Sociology for the Post-Colonial Fiscal State ...................................................................... 25 2.3 The Development of the Fiscal State ............................... 27 2.3.1. Stages of Development of the Fiscal State .............. 28 2.3.2.The Models of the Fiscal State ............................... 31 2.4 Challenges to Categorising the Post-Colonial
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Attiya Waris Tax and Development:Solving Kenya’s Fiscal Crisis through Human Rights
Fiscal State ...................................................................... 39 2.4.1.The Creation of the Post-Colonial Fiscal State ....... 40 2.4.2.The Colonial Fiscal State ....................................... 40 2.4.3.The Post-Colonial Fiscal State ............................... 43 2.4.4.Transitioning from One State Type to Another ....... 46 2.5 Meeting the Challenge to Fiscal Legitimacy through Well-Being ..................................................................... 47 2.6 Conclusion ..................................................................... 50
Chapter 3: The Fiscal State in Colonial Kenya............... 51
3.1 Systems of Fiscal Extraction and Distribution before British Colonisation of Kenya ......................................... 52 3.1.1. Pre-Colonial Kenya ............................................... 52 3.1.2.The Sultanate of Oman ......................................... 53 3.1.3.The Portuguese ..................................................... 56 3.2 British Colonial Fiscal Policy in Kenya ............................ 59 3.2.1. Creating the Vertically Integrated Fiscal Economy.. 63 a) Creating a Labour Force through Tax............. 65 b) The Non-Native Poll Tax .............................. 67 3.2.2. Fiscal Legitimacy: No Taxation without Representation ....................................................... 69 a) The African Population.................................. 69 b) The Europeans and Asians.............................. 71 3.2.3. Limiting Expenditure to Sustain the Colonial  Fiscal State............................................................. 73 a) Creating and Sustaining Colonial Fiscal Administration............................................... 75 b) Fiscal Re-distribution in the Colonial State ... 77 3.2.4. Creating the Post-Colonial Fiscal State  (1960-1964) ......................................................... . 85
Attiya Waris
Table of Contents
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3.3 Conclusion ..................................................................... 90
Chapter 4: Legitimising the Kenyan Post-Colonial Fiscal State................................................................... 93
4.1 The Era of Piecemeal Reforms (1964-1980) ................... 96 4.2 Tax Modernization Programmes (1980-1992) ................. 102 4.3 Decentralisation, Participation and Earmarking (1993-2003).................................................................... 109 4.4 Development and Societal Participation (2003 to date).... 114 4.5 The 2010 Constitution of the Republic of Kenya............ 119 4.6 Conclusion ..................................................................... 119
PART2: HUMANRIGHTSANDSTATEFISCALRESOURCES
Chapter 5: Realising Human Rights through Taxation........................................................................ 123
5.1 The Parallels between Well-being, Social Welfare and Human Rights................................................................ 125 5.1.1. Conceptualising Social Welfare,Well-being and  Human Rights....................................................... 126 5.1.2.The State Obligations under Social Welfare and  Human Rights....................................................... 132 5.2 The Human Rights Obligations on a State...................... 136 5.2.1.The Domestic Legal and Policy Framework ........... 140 5.2.2.The Obstacle to Realisation: Allocation of  Limited Resources................................................. 143 5.2.3.The Domestic Realisation of Human Rights ......... 146 5.3 Linking Tax to Human Rights to Legitimise the Fiscal State ...................................................................... 147 5.3.1.The Right to Development and Resources ............ 148 5.3.2. Active Free and Meaningful Participation............... 154
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Attiya Waris Tax and Development:Solving Kenya’s Fiscal Crisis through Human Rights
5.4 Conclusion ..................................................................... 158
Chapter 6: Linking Human Rights to Taxation through Participation: Budgeting for Development.............. 161
6.1 Participatory Budgeting (PB) in Brazil: PA ...................... 162 6.1.1.The Evolution of Participatory Budgeting in PA .... 167 6.1.2.The PA Model: Participation in the Budgeting  Process .................................................................. 170 6.1.3.The Evolution of the PA Model in Brazil............... 174 6.2 Fiscal Decentralisation in India: A Case Study of Kerala ... 176 6.2.1. Fiscal Budgetary Participation in India................... 180 6.2.2. Kerala.................................................................... 181 6.3 Participation in the Budget around the World.................. 184 6.4 Resource Allocation through Participation in Budgeting and the Role of Human Rights...................... 187 6.4.1.The Outcomes of Participation in Budgeting ......... 187 a) The Intended Consequences: Improved Governance ................................................... 190 b) The Unintended Consequences: Achievement of Human Rights ..................... 192 c) Unresolved Issues........................................... 194 6.5 The Creation of an Environment Conducive to Participation ................................................................... 195 6.5.1.The Constitutional and Legislative Framework...... . 196 6.5.2.The Policies and Ideology ...................................... 198 6.5.3. Informed Participation .......................................... 198 6.5.4. Quality of Participation ......................................... 201 6.6 Conclusion ..................................................................... 202
Attiya Waris
Table of Contents
PART3: CONTEXTUALISINGTAXATIONANDHUMANRIGHTSINKENYA
ix
Chapter 7: The Kenyan Constituency Development Fund..................................................... 207
7.1 Establishment of the Constituency Development Fund.... 208 7.1.1.The Historical Motivations for the Development of the CDF.............................................................. 210 7.1.2.The Legislative Development of the CDF .............. 213 7.2 The CDF Cycle and its Place in the National Budgetary Cycle.............................................................................. 217 7.2.1.The Current and Post July 2007 Amended  CDF Cycle............................................................ 218 7.3 Legitimating Taxation through the CDF.......................... 223 7.3.1. Corruption and Clientelism .................................. 225 7.3.2. Participation.......................................................... 227 7.3.3. Accountability, Responsibility and Transparency ..... 228 7.3.4. Mismanagement of State Fiscal Resources ............. 230 7.3.5. Decentralisation and the Constitutionality of  the CDF............................................................... 231 7.4 Linking Taxation using Human Rights within the CDF .. 234 7.4.1. Defining Development and the Right to  Development......................................................... 234 7.4.2. A Key Element of the Right to Development:  Participation .......................................................... 235 7.4.3. Achievement of Human Rights and the Right to  Development......................................................... 238 7.5 Conclusion ..................................................................... 239
Chapter 8: Conclusion....................................................... 243
8.1 Chapter Summary .......................................................... 243