Kenya tax model: Value added tax simulation analysis

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cg.authorship.typesNot CGIAR developing country instituteen_US
cg.authorship.typesCGIAR single centreen_US
cg.contributor.affiliationKenya Institute for Public Policy Research and Analysisen_US
cg.contributor.affiliationInternational Food Policy Research Instituteen_US
cg.contributor.donorCGIAR Trust Funden_US
cg.contributor.initiativeNational Policies and Strategiesen_US
cg.contributor.initiativeForesighten_US
cg.coverage.countryKenyaen_US
cg.coverage.iso3166-alpha2KEen_US
cg.coverage.regionAfricaen_US
cg.coverage.regionEastern Africaen_US
cg.coverage.regionSub-Saharan Africaen_US
cg.creator.identifierLensa Omune: 0009-0006-1080-4151en_US
cg.creator.identifierJuneweenex Mbuthia: 0009-0005-2518-1420en_US
cg.creator.identifierXinshen Diao: 0000-0003-4843-1670en_US
cg.howPublishedGrey Literatureen_US
cg.identifier.projectIFPRI - Development Strategies and Governance Uniten_US
cg.identifier.publicationRankNot rankeden_US
cg.identifier.urlhttps://repository.kippra.or.ke/handle/123456789/5257en_US
cg.placeNairobi, Kenyaen_US
cg.reviewStatusInternal Reviewen_US
cg.subject.actionAreaSystems Transformationen_US
cg.subject.impactAreaPoverty reduction, livelihoods and jobsen_US
cg.subject.impactAreaNutrition, health and food securityen_US
dc.contributor.authorShibia, Adanen_US
dc.contributor.authorOmune, Lensaen_US
dc.contributor.authorMbuthia, Juneweenexen_US
dc.contributor.authorDiao, Xinshenen_US
dc.contributor.authorOguso, Alexen_US
dc.contributor.authorOmwenga, Walteren_US
dc.contributor.authorKiptoo, Elvisen_US
dc.contributor.authorAli, Jecintaen_US
dc.contributor.authorLaichena, Joshuaen_US
dc.date.accessioned2025-02-05T21:13:43Zen_US
dc.date.available2025-02-05T21:13:43Zen_US
dc.identifier.urihttps://hdl.handle.net/10568/172822en_US
dc.titleKenya tax model: Value added tax simulation analysisen_US
dcterms.abstractTaxation can be used as a policy tool to influence economic behaviour, promote equity and achieve developmental goals. However, taxation can result in undesired outcomes if not well designed and implemented. Distortionary tax may adversely affect consumption, private sector investment (Adam and Bevan, 2014) and household welfare (de la Feria and Swistak, 2024). Kenya faces a similar trade-off between generating sufficient tax revenue to finance government programmes such as the Bottom-Up Economic Transformation Agenda (BETA) and mitigating potential adverse effects on domestic production and household welfare. The Value Added Tax (VAT) contributes about 30 per cent of Kenya’s total tax revenue (National Treasury, 2024). The average share of VAT to GDP for Kenya was 4.6 per cent between 2013/14 and 2023/24, comparable to that of East African Community (EAC) countries and Sub-Saharan African at 4.5 per cent (World Bank, 2024; East Africa Revenue Authorities Technical Committee, 2024), but lower than the 6.7 per cent for South Africa and the 5.2 per cent for lower-middle-income economies. VAT is a broad-based consumption tax, with tax incidence largely falling on the final consumers, and therefore any VAT policy changes have potential economy-wide implications. This is compounded by the fact that VAT is a regressive tax, meaning that low-income households spend a higher proportion of their income on vatable products compared to high income earners. The VAT in Kenya is currently imposed at a standard rate of 16 per cent, with certain essential goods, particularly primary agricultural produces, and services as VAT exempt or zero-rated.en_US
dcterms.accessRightsOpen Accessen_US
dcterms.audienceCGIARen_US
dcterms.bibliographicCitationShibia, Adan; Omune, Lensa; Mbuthia, Juneweenex; Diao, Xinshen; Oguso, Alex; Omwenga, Walter; Kiptoo, Elvis; Ali, Jecinta; and Laichena, Joshua. 2024. Kenya tax model: Value added tax simulation analysis. KIPPRA Policy Brief 252. Nairobi, Kenya: Kenya Institute for Public Policy Research and Analysis. https://repository.kippra.or.ke/handle/123456789/5257en_US
dcterms.extent8 p.en_US
dcterms.issued2024en_US
dcterms.languageenen_US
dcterms.licenseOtheren_US
dcterms.publisherKenya Institute for Public Policy Research and Analysisen_US
dcterms.subjecttaxesen_US
dcterms.subjectValue Added Taxen_US
dcterms.subjecteconomic behaviouren_US
dcterms.subjectwelfareen_US
dcterms.subjectincomeen_US
dcterms.typeBriefen_US

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