(NAIROBI, KENYA) – Calls are growing for Kenya to shift part of its tax burden from consumption to wealth, with policy experts and civil society groups pressing for a tax on the country’s richest individuals.
The push comes as ordinary households continue to carry a large share of the tax burden through consumption taxes, most of which goes towards repayment of public debt. Analysts warn that this is widening inequality. Wealth remains highly concentrated. Data from the World Inequality Database shows that the richest 10% of Kenyans control about 63% of the country’s wealth, while the top 1% controls about 29%.
Speaking at a stakeholder meeting organised by the Institute of Public Finance, researcher Daniel Murakaru, who is also a lawyer with the Kenya Women Parliamentary Association, said Kenya could raise significant revenue from the wealthiest households. He warned, however, that introducing a wealth tax without fixing weaknesses in tax administration could limit its effectiveness.
“Kenya must build the systems to track and verify wealth before imposing a net wealth tax, with the focus on Kenya Revenue Authority capacity, a central wealth database, international information sharing and safeguards against double taxation,” said Murakaru.
He pointed out that Kenya first needs better systems for identifying assets and their owners, including wealth held through companies, trusts and offshore accounts. The World Inequality Database shows the top 10% of Kenyans control roughly 63% of national wealth, with the top 1% alone holding 29%. Oxfam’s Inequality Report further states that 125 individuals in Kenya own more wealth than 42.6 million of their compatriots combined, while the bottom half of the population holds just 4% of national wealth.
The Institute of Public Finance argues that the focus should be on taxing only the truly wealthy by setting a high minimum threshold and using moderate, progressive tax rates. Kenya has about 7,200 dollar millionaires with assets worth more than KES 129 million ($850,000 / GBP 672,000), while 16 centi millionaires have assets above about KES 12.9 billion ($85 million / GBP 67.2 million). The institute says the tax threshold should fall within these ranges so that it targets the ultra wealthy rather than people who are simply financially comfortable.
Advocacy and policy expert Tashrifa Silayi said tax reforms would only gain public support if Kenyans could see how their taxes translate into better services.
“Tax fairness must connect to transparency and services. I pay for it, I need to see the value of it,” Silayi said. She said wealth taxation should be presented as a shared responsibility rather than a punishment for wealthy Kenyans.
The researchers also point to Uganda as an example of how targeted tax administration can improve compliance among wealthy taxpayers. Institute of Public Finance researcher Veronicah Ndegwa said Uganda established a specialised unit for high net worth individuals in 2015, helping increase filing rates among targeted taxpayers from 13% to 78% within three years. She urged the Kenya Revenue Authority to consider a similar approach, supported by specialists who can handle complex financial and investment structures.
The institute recommends that any wealth tax should focus only on the ultra rich rather than ordinary property owners and middle income households. The proposal includes modest progressive rates, with existing taxes such as Capital Gains Tax considered to avoid taxing the same wealth twice. The institute is, however, calling for a gradual approach, beginning with improvements to existing taxes and government records before introducing a new wealth tax.