The Effect of Tax Laws on Quality Education in Kenya

‘A tax on books is a tax on knowledge. It is a further boast for this country that we supply
education for all at the public cost but books are indispensable in this benefaction. Every tax
upon books, therefore, is an impediment to that education which is the pride of our country.’ Mr. Sumner February 27 1865 (the then Senator from Massachusetts)

Although the government has introduced and implemented free primary education and free secondary education for children in public primary and day secondary schools, the costs for other education related essentials remains high. Going to school often comes with a large price tag in the form of explicit and hidden fees eg, on tuition, textbooks, uniforms, supplies and exam fees. This poses a major hindrance to access to education for children.

The privatisation of education has also exponentially increased these costs. Considering the abandonment of the infrastructure in public schools and the low quality of education compared to private schools, many parents are more inclined take their children to private schools. The Committee on Economic, Social and Cultural Rights (CESCR) raised this issue in 2016 stating that; “inadequacies in the public schooling system have led to the proliferation of so-called ‘low-cost private schools.’

Research conducted by Action Aid between 2015 and 2017 shows that families are paying an average of Kshs. 1,655 ($16) per term per child in public schools and Kshs. 4,834 ($48) per term per child in private schools. According to the sampled respondents the most common school related fees charged in public schools were identified as examination fees, admission and uniform, and sports fees. In private primary schools, the charges included: examination fees, uniform and sports clothes, and admissions. Interestingly, from the same research, 20.4% of respondents said financial constraints were the main factor for parents not sending their children to school (as they could not pay the school related fees (uniforms, feeding etc.)) and 14.6% of respondents said tuition fees were the main factor. Eliminating hidden user fees would thus have a significant impact in reducing inequality in access to education.

A focus on Textbooks
Textbooks have always been at the very heart of the expenses to be incurred by parents when enrolling their children in school. At the beginning of every academic year, there is an outcry on the high prices of textbooks by parents. The implementation of the Competency-based Curriculum (CBC) has increased the burden on parents with children as young as Grade one being required to buy 10 or more books from specific publishers, reams of printing papers and encyclopedias, among other stationery.

Prior to September 2013, the government had zero -rated the supply of exercise books, dictionaries, encyclopedias and other printed books. However, due to the desire by the government to expand the Value Added Tax (VAT) net, through the current VAT Act, 2013 it introduced VAT at the standard rate of 16 per cent on the supply of text books, exercise books and other printed books. Since then, the price of text books has been on the rise. A further increase in the prices was witnessed at the beginning of the 2022 academic year as the Kenya Publishers Association (KPA) wrote to the Treasury and Ministry of Education seeking price adjustment. This is owing to the high costs of printing paper pursuant to the implementation by the Kenya Revenue Authority (KRA) of the 25% import duty on printing paper from the previous 10% early this year.

Lessons from Other Countries
Across Europe Countries across Europe have incorporated various incentives with the ultimate goal of using tax policies to make learning a lifelong reality. Some countries adopt an approach of reduced VAT on books while others exempt books completely. In Austria, books benefit from a reduced rate of 10%. A similar approach is seen in Netherlands, France, Germany, and Finland whereby books are subject to reduced VAT rates at 6%, 5.5%, 7%, and 8% respectively. Fewer countries adopt a complete tax exemption approach. In Ireland for instance, the VAT rate for books is 0 %.

Africa
Closer home, with the exception of a few countries like Kenya and South Africa learning materials are not subject to VAT. In countries like Botswana, Cape Verde, Ghana, Madagascar, Malawi, Nigeria, Somalia, Uganda among others, school books are completely exempt from VAT. Kenya was among these until 2013 when it decided to take a step back in the opposite direction. This move has been highly frowned upon globally as studies show that in the first year alone, the sales of school books are estimated to have risen by about 40%.

Conclusion
Although, Kenya has made significant milestones towards achieving Vision 2030 in terms of introducing free primary and secondary education, the cost of school books and other learning materials is an impediment to the quality of such education. The 16% VAT on books results in discrimination among the poor and marginalised children in terms of access to quality education. It is thus only proper for the nation to consider using tax incentives by either completely exempting school books and other learning materials from VAT or reducing the rate thereof to equalize access to education.

Shelmith Maranya,
Program Coordinator,
Amka Africa Justice Initiative.