Revenue waivers and national economic pressures: the hidden cost of tax expenditures in Kenya

With the support of the Third World Network (TWN), Tax Justice Network Africa (TJNA), the East African Tax Governance Network (EATGN), and Africa Centre for People Institutions and Society (ACEPIS), commissioned research on Kenya’s Tax Expenditures Framework and its implications on tax base erosion. The research was premised on the understanding that tax expenditures can be an appropriate tool when used to provide broad-based economic benefits. However, when used too frequently and ineffectively, or for purposes where direct government spending would be more appropriate, they can result in excessive loss of revenue
to the detriment of national economic development.

The study set out to assess Kenya’s tax expenditures by considering increasing concerns over their implications on the country’s revenue base; lack of transparency in administration of tax incentives; and questions over the opportunity cost of tax waivers in Kenya – considering the lurking public debt problem in the country. This to generate credible information on the efficacy and prudence of Kenya’s tax expenditures considering the current fiscal situation. This to inform advocacy efforts for a more just, equitable, and progressive tax regime in the country.

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