Comparative Analysis of The Efficacy of Kenya’s Taxation Legal and Regulatory Framework

Abstract

Taxation is critical for revenue mobilization in financing various government activities. As a result, is found and anchored in key law such as the Constitution of Kenya 2010, and the accompanying legislated statutes. This study presents a comprehensive comparative analysis of the efficacy of Kenya’s taxation legal framework, with a focus on its impact on economic growth, equity, and administrative legislated efficiency. It further assesses effectiveness of Kenya’s tax policies in comparison to those of several peer nations, using multidimensional approach that integrates legal and administrative perspectives. By examining key tax reforms including the introduction of the Value Added Tax (VAT) Act, the Income Tax Amendments, and recent tax digital initiatives, the study assesses influence on tax compliance, and revenue generation. The analysis utilizes data drawn from governmental reports, academic literature, and case studies of similar tax systems in emerging economies. Special attention is given to the legal robustness of tax regulations, the efficiency of tax administration mechanisms, and their fairness of the tax burden distribution across different income groups. Findings indicate that while Kenya has made significant strides in modernizing its tax system, challenges remain in achieving optimal efficiency and equity. Importantly, the study highlights areas where Kenya’s tax legal framework could benefit from reforms, particularly in enhancing administrative capacities addressing disparities. Finally, recommendations are proposed to improve the legal frameworks alignment with economic objectives and international standards, aiming to foster a more equitable and sustainable tax system.