Kenya’s wealthiest individuals could face a new tax burden under proposals seeking to raise more revenue while easing pressure on ordinary households that rely heavily on consumption taxes.
Policy experts and civil society organisations are calling on President William Ruto’s administration to consider taxing accumulated wealth, arguing that the country’s richest households hold a large share of national wealth that remains largely untapped for revenue collection.
The push for a more progressive tax system comes as ordinary Kenyans continue to contribute heavily through taxes imposed on goods and services
. Much of the money collected is used to repay public debt, raising concerns among analysts that the current system places greater pressure on households with lower incomes.
Figures from the World Inequality Database show that the richest 10 per cent of Kenyans control about 63 per cent of the country’s wealth. The top one per cent alone holds about 29 per cent.
The figures formed part of discussions at a stakeholder meeting organised by the Institute of Public Finance (IPF), where researcher Daniel Murakaru, also a lawyer with Kenya Women Parliamentary Association, called for stronger systems before Kenya introduces a net wealth tax.
Murakaru said the country must first improve its ability to establish who owns different forms of wealth and where those assets are held.
“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 said such systems should cover assets held through companies, trusts and offshore accounts, which can make it difficult for authorities to establish the actual wealth of individuals.
The wealth gap is also highlighted by the Oxfam Inequality Report, which states that 125 individuals in Kenya own more wealth than 42.6 million of their fellow citizens combined. It further puts the share of national wealth held by the bottom half of the population at only four per cent.
IPF wants any new tax to be carefully targeted so that it affects only people with very high levels of wealth. It proposes a high minimum threshold and moderate, progressive rates to avoid bringing ordinary financially comfortable households into the tax net.
Kenya currently has about 7,200 dollar-millionaires, whose assets are worth more than Sh129 million each. There are also 16 centi-millionaires with assets exceeding about Sh12.9 billion.
According to IPF, these wealth levels provide a possible range for setting a threshold that would concentrate the tax on the ultra-rich rather than a wider section of the population.
Advocacy and policy expert Tashrifa Silayi said the success of tax reforms would also depend on whether Kenyans can see a clear link between the money they pay and the services they receive.
“Tax fairness must connect to transparency and services. I pay for it, I need to see the value of it. said wealth taxation should be presented as a shared responsibility rather than a punishment for wealthy Kenyans,” Silayi said.
Researchers at the meeting also cited Uganda as an example of how targeted tax administration can improve compliance among wealthy taxpayers.
IPF researcher Veronicah Ndegwa said Uganda created a specialised unit for high-net-worth individuals in 2015. The move helped raise filing rates among the targeted taxpayers from 13 per cent to 78 per cent within three years.