In Summary

A big tax burden on given economic activities may increase revenue in the short-run, but will impede the growth and profitability of the affected industries and lead to their malnourishment.

A big tax burden on given economic activities may increase revenue in the short-run, but will impede the growth and profitability of the affected industries and lead to their malnourishment.
Therefore, the solution lies in the revenue authority expanding the tax base by looking at new areas and economic activities that have less tax compliance such as the informal sector.

The accumulation of capital by different industries, which has not been over taxed, will spur economic growth because this money will be loaned out to other private businesses, government or invested in new economic activities.
For example, the availability of capital enabled telecommunication companies to venture into financial business in form of mobile money to improve transfer of capital in a secure and efficient (faster) way.

It takes seconds for one to receive money across the country and we can send and receive money around East Africa within seconds and with no paperwork.
Small loans are now being provided without demand for collateral. No one has to go to the telecom company offices to fill in paperwork, provide passport photos or open up an account at a fee.
Capital is a major factor of production and mobile money and Saccos provide efficient and flexible alternatives of acquiring funds, especially for small scale businesses.

These two new options are helping many small scale economic activities countrywide as they, among others, require little or no collateral and it is easy to access them. They also attract low interest rates and little or no paperwork, among others.
The solution to improving revenue collection should be expanding the tax base through organising the informal sector, turn it to formal or semi-formal and make it taxable.

For example, in the case of wholesale and retail shops, the revenue authority should introduce small portable electronic receipt machines as is done in other countries. Then all vendors/sellers should operate from the market.
No one should be allowed to operate on the roads. Besides, the boda boda industry should be organised and registered private companies such as Safe Boda, Uber and Taxify that are doing so.

If every economic activity can pay at least a small percentage of its profit as tax, then the tax burden will be spread out and we shall avoid a huge tax burden on other industries that might cripple them.