KIMARI: Housing tax is contractionary and ill-timed - Daily Nation

Why housing tax is contractionary and ill-timed

Tuesday October 9 2018

An affordable housing project in Mtwapa.

An affordable housing project in Mtwapa. While decent housing is, undoubtedly, desirable, it cannot be provided by the government without violating people’s right to choose or unduly burdening the economy. PHOTO | FILE 

By GITHIEYA KIMARI
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The new tax to fund President Uhuru Kenyatta’s affordable housing legacy project is predicated on the proposition that shelter is a basic human right and the government has a constitutional obligation to provide it. But given its unpopularity, one is bound to ask whether, to Kenyans, housing is a basic right, and if to be provided by the State.

A human right is innate, inalienable and not granted by a government. Just as you do not see the public demanding less freedom of speech, one should not expect Kenyans to resist public housing if, indeed, it is a human right. That it is happening questions whether our Bill of Rights reflects their true feelings.

FREEDOM

Since the Universal Declaration of Human Rights (UDHR) charter was adopted by the United Nations in 1948, categorisation of shelter as a human right has been highly contested. From the outset, the UDHR was split into the International Covenant on Economic, Social and Cultural Rights (ICESCR or ESR) and the International Covenant on Civil and Political Rights (ICCPR or CPR). CPRs are meant to protect citizens from infringement by governments and individuals as they participate in the civic and political life of their society. They include freedom of speech and association as well as protection against torture.

ESRs include — but are not limited to — the rights to work, form and join a trade union, enjoy an adequate standard of living and access food, adequate housing, health and education.

OBLIGATIONS

By 2015, out of the 195 UN members, 164 were parties to the covenant and six, including the United States, had signed up but not ratified the treaty. Kenya ratified it in 1972 and incorporated ESRs in the 2010 Constitution.

Although all the parties to the charter immediately ratified CPRs, there was a considerable disagreement over ESRs. Ideologically, conservatives argued that individuals, not the State, are responsible for basic needs such as shelter and clothing. This is consistent with conservative opposition to government usurping individual responsibilities. A secondary consideration was that since ESRs would have to be funded through taxes, that would impose an unsolicited obligation on taxpayers. From the Kenyan experience, the tax can be likened to, during the Kanu regime, when civil servants were compelled to make ‘harambee’ contributions for a party functionary to appear philanthropic.

JUDICIABLE

The legal case against ESRs was equally persuasive and was anchored on the argument that, unlike CPRs, they are not judiciable. Given the fact that the concept of decent housing could vary from country to country, there lacks a universal standard to prosecute non-compliance.

Arguments against the housing tax are similar. Many Kenyans resent the fact that they are being forced to reallocate family budgets yet there is no guarantee of benefiting from the project. A teachers’ trade union has even argued that most of their members live in the rural areas yet the projects are in urban areas.

To expect families saddled with bills to shoulder the responsibility of housing fellow citizens is both to impose an unsolicited obligation and violate their basic right to choose.

FOOLHARDY

Many Kenyans have also wanted to know how the standard public housing will look like, considering that dwellings in Kenya range from a hut in rural areas to a mansion in the suburbs.

On the economics of the projects, the public is even less convinced of its urgency. Given the high budget deficits, the government can only provide such services by either raising taxes or borrowing. Such fiscal and monetary policies are, however, contractionary and undermine initiatives to spur economic growth and employment.

Moreover, given the rampant corruption, it is foolhardy to put such huge amounts of money in the visible hand of the government.

INDISPENSABLE

While decent housing is, undoubtedly, desirable, it cannot be provided by the government without violating people’s right to choose or unduly burdening the economy. Though indispensable in the enhancement of human dignity, ESRs do not fit the standard definition of human rights — especially since their provision confers negative rights to the public.

The right to housing and other ESRs should be removed from the Bill of Rights and political parties left to explain how they plan to address social challenges from their respective ideological perspectives.

The housing tax is contractionary and ill-timed. A better legacy would be to fix the economy and leave it to the invisible hand of the market to determine provision of ESRs.

Mr Kimari is an economic and political analyst. [email protected]

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