Tax Reforms and Revenue Productivity in Kenya
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Date
2011-11Author
Gituku, Francis G
Type
ThesisLanguage
enMetadata
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An appraisal of the fiscal structure analysis in Kenya reveals a very large imbalance between
government revenue and expenditure which has over the years resulted in large and chronic
fiscal deficits. This persistent fiscal deficit has greatly hampered government performance in its
primary objectives of provision of public goods and services and also in funding of both the
recurrent and development expenditures. Under this threat of fiscal crisis, many developing
countries have had to make projections of additional revenue that can be realized within the
existing tax structures. These projections indicate the need to activate additional means of
revenue generation. Tax reforms have been the agenda of many developing countries. This study,
therefore, sets to establish the implication of tax reforms on revenue productivity for the period
1990-2010 in Kenya using elasticity and buoyancy models. Proportional adjustment method
(PAM) was used due to its superiority in adjusting tax revenue figures in order to estimate
elasticity. Empirical findings suggest that for the period under study, the Kenyan tax system was
in general not productive despite several reforms and measures undertaken. This is highlighted
by buoyancy and elasticity less than unity for all taxes except for excise duty. VAT and direct
taxes were the mostly affected by reforms as the difference between elasticity and buoyancy was
above 0.2
Citation
MA ThesisSponsorhip
University of NairobiPublisher
University of Nairobi, School of Economics, University of Nairobi