Authors
Table of Contents
- On Efficiency Equity and Optimal Taxation On Efficiency Equity and Optimal Taxation 3
- Reforming Kenyas Tax System Reforming Kenyas Tax System 3
- Introduction 6
- Methodology 8
- Study Objectives 9
- Why are Efficiency Equity and Optimal Taxation Measures Critical to Kenyas Tax System Reform 10
- Definition of Key Concepts 12
- 5.1. Efficiency in a Taxation System 12
- 5.2. Concepts related to the Efficiency of the Tax System 13
- 1. Tax Wedge 13
- 2. Deadweight Loss 13
- 5.3. Analysis of the Relationship of Tax Wedges Deadweight Loss and 14
- Efficiency of the Tax System 14
- 5.4. Principles of Reducing Deadweight Loss and Improving Tax Efficiency 14
- Optimal Taxation 16
- Equity in the Tax System 18
- 7.1. Horizontal Equity 18
- 7.2. Vertical Equity 18
- Efficiency Versus Equity Principles in Kenyas Taxation System What Trade- Offs Exist 19
- 8.1. Distribution of Burden 19
- 8.2. Kenyas Tax Buoyancy 21
- 8.3. Equity Analysis Income Tax Example 22
- 8.4. Tax Elasticity Example of Fuel Taxes 24
- 8.5. Deadweight Loss 25
- 8.6. Importance of Deadweight Loss to Policymakers 28
- 8.7. How can the approach to Trade-offs of Efficiency and Equity in Kenyas 29
- Taxation System be done 29
- Key Messages 30
- References 31
- Annexes 33
- Annexe 1 Composition of Ordinary Revenue 33
- Annexe 2 Government Revenue by Tax Type 33
- Annexe 3 Fuel Demand and Types of Fuel 34