Stakeholders Push for Fairness and Accountability in Kenya’s Tax Reforms

By Victoria Musimbi

Kenya’s pursuit of fiscal justice and accountability remains central to the implementation of the National Tax Policy (2023), a framework designed to ensure taxation is fair, transparent, and responsive to citizens’ needs. Anchored in the Constitution of Kenya (2010), the policy outlines key reforms under the Medium Term Revenue Strategy (MTRS), including expanding the tax base, enhancing compliance, and strengthening transparency in public finance management.

While these reforms aim to promote equitable burden-sharing and curb tax evasion, concerns persist over their impact on vulnerable groups particularly youth and informal sector workers already facing economic strain.

It is against this backdrop that the National Taxpayers Association (NTA), in partnership with Oxfam, convened a multi-stakeholder roundtable bringing together civil society, media, and private sector actors. The forum provided a platform to assess progress in implementing the policy, identify gaps between policy and practice, and generate inclusive, evidence-based recommendations to advance fiscal justice in Kenya.

Isaiah Kaaka, a legal advisor and Chairperson of the Kenya Civil Societies Network Youth Caucus, emphasized the importance of youth perspectives in ongoing tax reforms.

“We are here to give inputs to citizens on the implementation of new tax reforms spearheaded by the National Taxpayers Association,” he said.

“Young people are particularly concerned about how revenue is generated and more importantly, how it is allocated and utilized.”
Kaaka noted that transparency and public participation remain key expectations among citizens.

“Kenyans want to understand how taxes are collected and used. There must be clear and accessible frameworks that allow meaningful public engagement,” he added.

From a policy perspective, Austin Cheboi, a microeconomist at the Kenya Institute for Public Policy Research and Analysis (KIPPRA), highlighted the country’s untapped revenue potential.

“Kenya has the capacity to raise revenue up to 25 percent of GDP, but currently we are at about 17 percent, leaving a significant gap,” he said. “This points to a narrow tax base and underscores the need to integrate the informal sector into the revenue framework.”

Cheboi also raised concerns about tax expenditures, noting that Kenya spends between 3.1 and 3.5 percent of its GDP on tax incentives. “The key question is whether these expenditures are effectively targeted to stimulate economic performance, or whether reducing them could enhance revenue mobilization,” he said.

Public participation also featured prominently in the discussions, with reference to the proposed Public Participation Bill 2025, which seeks to standardize citizen engagement in governance processes.

Patrick Nyangweso, CEO of the National Taxpayers Association, underscored the importance of citizen engagement in shaping an effective tax system.

“This roundtable comes at a critical time during the budget-making process. The national tax policy, adopted in 2023, is meant to guide taxation over the next five years, with a focus on predictability and transparency,” he said.

Nyangweso emphasized that taxation directly affects the daily lives of Kenyans, from Value Added Tax on essential goods to Pay As You Earn (PAYE) deductions on salaries. However, he noted that many citizens remain unaware of the policy guiding these processes.

“Not everyone understands that there is a national tax policy in place. More needs to be done to cascade this information and ensure citizens know their rights and responsibilities,” he said.
He added that predictability in taxation is essential for attracting both domestic and foreign investment, warning that inconsistent tax policies could discourage investors.

“Being informed strengthens the social contract between citizens and the state. Taxation is not just a financial obligation it is a governance relationship built on trust,” Nyangweso said.

Currently, tax compliance in Kenya stands at about 70 percent, with the Kenya Revenue Authority targeting an increase to 90 percent under the new framework. Experts say achieving this will depend on improving transparency, fairness, and accountability in the use of public resources.

Stakeholders also called for increased investment in digitization and public awareness to improve understanding of tax systems, particularly among marginalized groups.

At the county level, Nyangweso urged governments to strengthen their own-source revenue streams instead of relying heavily on national allocations.

“Counties must create enabling environments for small businesses, farmers, and entrepreneurs. Without grassroots economic empowerment, revenue growth will remain limited,” he said.

As Kenya moves forward with implementing the National Tax Policy, stakeholders agree that balancing revenue growth with fairness will be critical. Ultimately, the success of these reforms will not be measured by how much tax is collected, but by whether citizens can see, feel, and trust the impact of how their taxes are used.