Kenyans 3rd Most Taxed Citizens in Africa- OECD Report 2018

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Kenyans 3rd Most Taxed Citizens in Africa- OECD Report 2018

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Kenyans 3rd Most Taxed Citizens in Africa- OECD Report 2018

According to a report by the Organisation for Economic Co-operation and Development (OECD) titled “Secretary General’s Report to Ministers 2018,” Kenya ranks third after South Africa and Swaziland with regards to African countries where individuals pay more tax than profit taxes from corporations.

The report indicates that income tax from individuals in Kenya contributes 26.6 per cent of the total tax revenue while tax from businesses contributes 11.8 per cent. On the other hand, South Africans pay the most taxes on the continent with personal income tax contributing 33.4 per cent while corporations contribute 16.4 per cent. In Swaziland, personal income stands accounts for 28.7 per cent of the country’s tax revenue.

The findings come at a time when Kenyans are grappling with an increased cost of living after the implementation of 16 per cent VAT on petroleum products. There is, however, a proposal to reduce the tax to 8 per cent.

High Dependency on Income Tax

The Institute of Certified Public Accountants of Kenya (ICPAK) in a recent study said tax revenue in the country rose from Sh651 billion in 2010/2011 to Sh1.1 trillion in 2014/2015 mainly because of increase in income tax.

Naomi Rono from the ICPAK Public Policy and Governance Department said Kenya largely depends on income tax unlike other countries like Nigeria, South Africa, and Angola that depend on commodities for their revenue.

“Taxation could be a means to hedge against the risks associated with reliance on commodities,” she said adding that although the number of taxpayers filing their taxes has increased, the number is still too small to spread out the tax burden evenly. Currently, the employed population is shouldering the greatest chunk of the tax burden, especially with the Treasury increasing income tax to bridge budget deficits.

According to MediaMax, the Treasury has been asked to broaden the tax bracket in order to reduce the burden on the small tax-paying population.

Still, a lot needs to be done to eliminate the dependency on income tax, particularly, with the high cost of living in the country.

 

Kenyans 3rd Most Taxed Citizens in Africa- OECD Report 2018 Reviewed by on September 18, 2018 .

Kenyans 3rd Most Taxed Citizens in Africa- OECD Report 2018 According to a report by the Organisation for Economic Co-operation and Development (OECD) titled “Secretary General’s Report to Ministers 2018,” Kenya ranks third after South Africa and Swaziland with regards to African countries where individuals pay more tax than profit taxes from corporations. The report

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