Government revenue and expenditures in Kenya with emphasis on trends and compositions

Abstract

Since the Second World War, the role of the public sector has expanded significantly in most economies. This is evidenced bytotal Government expenditure's share in GNP which averages 30 percent and 25 per cent for developed and developing countries, respectively. It is thought the expanded role of Government which is financed mainly by taxes comes as a result of the Government's power to allocate resources efficiently where the market fails to do so and from its ability to provide relief to the poor. The public finance literature review presents methods of identifying tax capacities for both developed and developing countries. Some of the methods used in developed countries are not found to be applicable in developing country. The study examines the composition and trends of expenditures and revenues in Kenya, between 1964/65 to 1986/87.