Taxing for a More Equal Kenya: A five-point action plan to tackle inequality

By Catherine Ngina Mutava​

Extreme inequality is out of control in Kenya. Less than 0.1% of the population (8,300 people) own more wealth than the bottom 99.9% (more than 44 million people). Tackling inequality could help to lift millions out of poverty, secure sustainable economic growth and bring the country together. Inequality is not inevitable and the government can reduce it to sustainable levels. If Kenya increased its tax-to-GDP ratio by 3 percentage points in 2014 it could have raised enough additional funds to ensure quality healthcare for all Kenyans. By delivering on our five-point action plan to tax and spend effectively, the government will ensure a more equal and



Fiscal Policy For Financing Sustainable Development In Africa

By Catherine Ngina Mutava​

Africa is at a critical juncture in its development trajectory. Policies adopted now will determine how quickly the continent accelerates growth and creates prosperity for all. In 2015, African countries signed up to two important development agendas: the global 2030 Sustainable Development Goals (SDG), which aims to leave no one behind as
countries develop, and the African Union’s Agenda 2063, which sets out a blueprint for the “Africa we want”. A decade away from the SDG endpoint, African countries continue to search for policy mixes to help accelerate the achievement of these targets. However, for many countries, financing remains the biggest bottleneck with implementing capacity a close second.

Use KRA to fight corruption

By Catherine Ngina Mutava​
What You need to know:
  • Despite its sometimes infuriating systems, the KRA is one of the more efficient government agencies in Kenya, thanks to the reforms put in place by the Mwai Kibaki administration.
  • With the new Tax Procedures Act in place and the recent ruling that illegal income is taxable, the KRA may just be best placed to slay the dragon.
  • One need not be a psychic to know that most of the beneficiaries of corruption do not pay taxes on their loot. The penalties for tax evasion under the new Tax Procedures Act include fines of up to Sh10 million and/or imprisonment of up to 10 years.
  • All the KRA needs to do is trace one of the beneficiaries of corruption and prosecute him for tax evasion.
  • Human beings are innately self-preserving and few would turn down an offer to provide information on their co-conspirators if it meant no time or reduced time served as a guest of the State.

The true price of management fees

By Catherine Ngina Mutava​

Tax treaties are supposed to serve two purposes. They are meant to avoid double taxation and to prevent tax evasion. In practice, they all too often turn out to be double non-taxation agreements.

Review of Tax Treaty Practices and Policy Framework in Africa

By Catherine Ngina Mutava​

In recent years, tax treaties concluded by sub-Saharan African countries have become more residence-based with fewer provisions allocating taxing rights to the source countries. This trend is observed in treaties signed with OECD countries in particular. For countries which are capital importers, as is the case with most African countries, this means that these countries have been slowly ceding their taxing rights over income earned within their jurisdiction. This could be deliberate as the countries try to attract foreign direct investment, or it could be the result of a lack of policy to guide treaty negotiations. In the countries we reviewed, the latter reason seemed to prevail.
From this study, it is apparent that many sub-Saharan African countries do not have a treaty policy in place. The lack of a policy creates ambiguity on matters such as who should be involved in negotiating and concluding tax treaties, which countries are viable treaty partners, and the minimum tax treaty terms that a country should contend for. This provides room for political and elite capture of the negotiation process and leads to the conclusion of treaties without adequate consideration of their technical implications, which could therefore be detrimental to the country.