Can Kenya Tax the Rich? IPF Report Lays Groundwork for Wealth Tax Debate
The Institute of Public Finance (IPF) on December 9, 2025, launched a new research paper titled “Tax the Rich: Can Kenya Get Wealth Taxation Right?” at the Ngong Hills Hotel, igniting a national conversation on progressive taxation as a pathway to addressing Kenya’s deepening inequality.
The study, unveiled brought together journalists, civil society organisations, government agencies and development partners, to examines whether wealth taxation can be effectively designed and implemented in Kenya’s current public finance environment.
Speaking at the launch, IPF’s Victoria Justus said the report offers timely, evidence-based insights on how Kenya can strengthen revenue mobilisation while restoring public trust in the tax system to support inclusive development.
Presenting the findings, IPF economist Veronica Ndegwa noted that the report responds to a stark reality where economic growth has not translated into shared prosperity. She highlighted that millions of Kenyans continue to live in poverty even as wealth concentrates among a small elite, pointing to weaknesses in public finance and redistribution systems that have failed to close the widening gap between the rich and the poor. Ndegwa stressed that the wealth debate is not only economic but also central to social stability and the country’s future.
The paper, authored by Daniel Murakaru in collaboration with Oxfam, does not call for the immediate introduction of a wealth tax. Instead, it recommends a sequenced reform approach, beginning with foundational administrative, legal and institutional reforms. Chief among these is the creation of a centralised and comprehensive wealth database capturing ownership of land, financial securities, digital and cryptocurrency assets, domestic and offshore bank accounts, and beneficial ownership structures. The study recommends integrating data across institutions such as the Kenya Revenue Authority, Lands Registry and Companies Registry to improve transparency and enforcement.
Further recommendations include strengthening cross-border information exchange in line with international transparency standards, introducing voluntary asset disclosure programmes to encourage compliance, and ensuring strict adherence to data protection and privacy laws. In the short term, the report proposes reforming existing wealth-related taxes, including harmonising capital gains tax with corporate income tax rates.
On future design, the study recommends that any wealth tax should target only the ultra-wealthy through high exemption thresholds, apply modest progressive rates, avoid double taxation, and include safeguards against capital flight. To gain public legitimacy, the report underscores that revenues must be transparently invested in public priorities such as universal healthcare, quality education and social protection.
IPF stated that while a fair and effective wealth tax is achievable, its success will depend on political will, strong institutions, civic engagement and a clear commitment to reducing inequality and building a more inclusive Kenyan economy.
An executive summary discussing the state of taxation and wealth inequality in Kenya includes:
VAT System Issues: Kenya’s current VAT system is described as disproportionately regressive, failing to meet proportional tax goals and excluding many essential goods from the tax base.
Wealth Inequality: There is a significant concentration of wealth, with the top 10% of the population holding 62.8% of net personal wealth, while the bottom 10% holds only 4%.
Proposed Wealth Tax: Estimates suggest a properly structured wealth tax could generate over USD 1 billion annually, potentially enhancing public services, reducing inequality, and achieving social justice goals.
Global Context: Global experiences with wealth taxation are mixed. Some OECD countries repealed their taxes due to hurdles, while others like Switzerland have demonstrated successful implementation with efficient compliance. Other nations, such as Uganda and Rwanda, focus on strengthening existing tax structures and closing loopholes rather than introducing new wealth taxes.
The outlines recommendations for implementing a wealth tax in Kenya includes;
Immediate Reforms: Kenya should start by harmonizing Capital Gains Tax (CGT) rates with the existing 30% corporate income tax rate.
Civic Engagement: Civic actors are encouraged to advocate for a national wealth tax agenda to address wealth inequality.
Future Design Principles:
A clear legal framework is required, defining the tax base and ensuring fairness by avoiding double taxation.
The tax should target the wealthy with a high exemption threshold (around KES 129 million) and modest, progressive rates (0.01% to 3.5%).
Measures must be in place to prevent capital flight, including offshore asset declarations and international cooperation.
Revenue should be transparently earmarked for redistributive priorities like universal health coverage and education to gain public legitimacy.
Conclusion: While implementing a fair and effective wealth tax is achievable, it requires deliberate policy design and political courage
