NAIROBI, Kenya – Kenya is forfeiting up to Sh130 billion every year because of weak and ineffective taxation of high-net-worth individuals, a new report by Oxfam and the Institute of Public Finance (IPF) shows.
The study warns that systemic gaps in the country’s tax framework are enabling the wealthy to underpay taxes, starving the government of revenue that could finance essential services — including almost the entire Ministry of Health budget.
The release comes at a time when calls are growing for the government to ease the burden on ordinary Kenyans, who continue to shoulder the bulk of taxes despite rising inequality and mounting debt pressures.
According to the analysis, Kenya’s tax system remains ill-equipped to capture a fair share of revenue from the country’s increasingly wealthy class, even as the number of millionaires grows.
“Despite Kenya having various tax measures that target the wealthy, such as capital gains tax and rental income tax, these often are ineffective as they are charged at lower rates compared to income tax and often fail to yield significant revenue,” said IPF CEO James Muraguri.
The report paints a stark picture of wealth distribution, noting that the top 10 per cent of Kenyans control 62.8 per cent of net personal wealth, while the bottom half collectively holds only 4 per cent.
Yet the country lacks an enforceable mechanism to ensure those at the top contribute proportionately.
Although Kenya’s income tax system is progressive on paper, the state relies heavily on consumption taxes — VAT and excise duty — which disproportionately affect low-income households.
World Bank data shows that in 2022/23 alone, consumption taxes accounted for 56.2 per cent of total government revenue.
Meanwhile, the wealthy continue to expand their fortunes, often moving assets through opaque structures.
Kenya is now home to an estimated 7,200 dollar millionaires and at least 16 centi-millionaires with assets above Sh12.9 billion, according to the Africa Wealth Report.
Experts warn that without targeted reforms, Kenya’s tax system will remain skewed against the poor while billions in potential revenue slip through the cracks — undermining efforts to reduce inequality and fund priority sectors.
