Tax reforms and revenue mobilization in Kenya
One of the key objectives of tax reforms in Kenya was to ensure that the tax system could be harnessed to mitigate the perpetual fiscal imbalances. This would be achieved through tax policies intended to make the yield of individual taxes responsive to changes in national income. In addition, it was expected that the predominant taxes in the revenue would be those with highly elastic yields with respect to national income (or proxy bases). This study applies the concepts of elasticity and buoyancy to determine whether tax reforms in Kenya achieved these objectives. Elasticities and buoyancies are computed for the pre-reform period as well as the post-reform period. Evidence suggests that reforms had a positive impact on the overall tax structure and on the individual tax handles. In fact, the elasticity of indirect taxes was low and that of direct taxes was high, especially after the reforms. Despite this positive impact, the reforms failed to make VAT responsive to changes in income, although VAT was predominant in the tax structure.
|Date of creation:||May 2003|
|Contact details of provider:|| Postal: P.O. Box 62882, Nairobi|
Phone: (254-2) 228057
Fax: (254-2) 219308
Web page: http://www.aercafrica.org
More information through EDIRC
When requesting a correction, please mention this item's handle: RePEc:aer:rpaper:rp_131. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (winston wachanga)
If references are entirely missing, you can add them using this form.