The Effect of Consumption Taxes on Poverty and Income Inequality in Kenya

Maina, Anne Wanyagathi

doi:10.15640/ijat.v5n2a5

Cited by 12 publications

(18 citation statements)

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“…In this case qualitative approach is employed in the first stage to inform the second stage quantitative part to gain a complete comprehension of the subject under study by combining the two approaches, together with integrating the results. Such is the case with IS taxation which is argued to be an under-researched phenomenon in developing countries and in Zimbabwe, with minimal available literature (Ligomeka, 2019;Maina 2014Maina , 2017Sebele-Mpofu, 2020). Creswell and Clark (2018) recommend the use of MMR for researching on understudied subject areas.…”

Section: Methodsmentioning

confidence: 99%

“…According to Joshi et al (2013Joshi et al ( , 2014 and Rogan (2019), there seems to be a consensus amongst revenue authorities, governments, development organisations such as the World Bank, African Development Bank and the International Monetary Fund (IMF) that African governments would have to work industriously to bring the informal sector into the tax basket. Researchers concur that the IS occupies the most complex domain with regards to taxation, due to its characteristics such as the hidden nature, small scale, ease of tax evasion and mobility as well as diversity, yet they disagree on the impact of taxation on the viability of the sector"s activities (Joshi et al, 2014;Ligomeka, 2019;Maina, 2017;Munjeyi, 2017). The sector represents an understudied yet promising group of potential taxpayers.…”

Section: Introductionmentioning

confidence: 99%

“…These efforts have been argued to be unsuccessful and faced with considerable hindrances impeding effective taxation of this sector. Tax revenues from this sector are argued to be very inconsequential and worryingly low in comparison with the sector"s magnitude and contribution to GDP (Ligomeka 2019;Maina, 2017). Researchers such as Prichard (2009) and Masarirambi (2013) are quick to point out that a large chunk of this sector continues to slip through the noose of tax authorities, even as governments continue to grapple with the problem of how to manage this or even to efficiently and effectively collect tax revenues from the sector.…”

Section: Introductionmentioning

confidence: 99%

“…The focus on the evaluation and the outcomes of this appraisal of the IS tax framework would assist policymakers in improving IS tax policy. Maina (2014Maina ( , 2017 points to a dearth in research that evaluates the current presumptive taxes" appropriateness in mobilising tax revenues from the IS, provide justifications why they are performing below expectations and provide suggestions to ameliorate the handicaps. Joshi et al (2014), suggests that, there is also a lacuna in literature that advances research in legal, regulatory and administrative reforms in informal sector taxation.…”

Section: Introductionmentioning

confidence: 99%

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Taxing the informal sector through presumptive taxes in Zimbabwe: An avenue for a broadened tax base, stifling of the informal sector activities or both

Mpofu¹

2021

J. Account. Taxation

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Domestic revenue generation occupies a central domain in most countries, leading to continuous mapping of strategies towards its enhancement. Taxation is a dependable and foreseeable avenue to generate revenue for governments to fulfil their key obligations of employment creation, economic growth and infrastructural development, poverty reduction and state security. Despite these plausible arguments, tax revenues are minimal and tax bases narrow in developing countries. Contemporary tax debates point out that informal sector represents a lucrative fountain of tax revenue for governments, yet opponents of taxing the sector suggest that taxation might cripple small firms. Zimbabwe introduced presumptive tax in 2005, further enforcing to expand the tax base by including the sector into the tax basket in 2011. Researchers have focused on tax evasion and non-tax compliance when studying this sector, this paper focuses on the stakeholders perceptions on the impact of informal sector taxation on revenue generation and growth. This study adopted a sequential exploratory mixed method approach, argued to be ideal for under-researched areas such as this one. Key findings were that the current one size fit all tax framework suffocates small firms. Governments have to strike a balance between revenue mobilisation and the sector's key economic contributions, without crippling informal firms.

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Section: Methodsmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

See 2 more Smart Citations

Taxing the informal sector through presumptive taxes in Zimbabwe: An avenue for a broadened tax base, stifling of the informal sector activities or both

Mpofu¹

2021

J. Account. Taxation

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“…Martinez-Vazquez et al (2011) stated that the effects of taxes on inequality depend on the size of the system of taxation; since countries with a smaller tax system have a positive effect on inequality while nations with larger size of the system of taxation have a negative effect on income inequality. Maina (2017) stated that taxes can directly affect income distribution in terms of the impact of tax or how tax revenue is spent.…”

Section: Literature Reviewmentioning

confidence: 99%

Taxes and Income Inequality in Nigeria: 1980 – 2020

Appah¹,

S.S.²

2023

African Journal of Economics and Sustainable Development

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This study investigated the relationship between taxes and income inequality in Nigeria from 1980 to 2020. The specific objectives were to investigate the relationship between personal income tax and Gini coefficient, evaluate the relationship between company’s income tax and Gini coefficient, assess the relationship between petroleum profit tax and Gini coefficient, determine the relationship between capital gain tax and Gini coefficient, investigate the relationship between value added tax and Gini coefficient, evaluate the relationship between custom and excise duty and Gini coefficient from 1980 to 2020 in Nigeria. The study adopted ex post facto and correlational research design. The population of the study consisted of taxes and gini coefficient in Nigeria from 1980 to 2020. The secondary data were sourced from Federal Inland Revenue Service (FIRS), Central Bank of Nigeria (CBN), and National Bureau of Statistics (NBS) of various publications ranging from 1980 to 2020. The study used univariate, bivariate and multivariate analysis. The results revealed a positive and insignificant relationship between personal income tax company’s income tax (CIT), petroleum profit tax (PPT), capital gain tax (CGT), value added tax (VAT), custom excise duties (CED) and Gini coefficient for the period under study, while strong positive relationship when literacy rate moderate tax structure, and weak positive and insignificant relationship. On the basis of the findings, the study concluded that taxes such as personal income tax, company income tax, petroleum profit tax, capital gain tax, value added tax and customs and excise duties influence the level of income inequality in Nigeria. The study recommends, amongst other things, that the government should ensure compliance to tax payments, because taxes provide a powerful policy tool effectively used for curing economic and social ills and should not to be set too high, as this would discourage investments.

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