Fitch says that weak growth in revenue, largely tax receipts, presents the biggest challenge to Kenya’s fiscal consolidation plan.
A less explored topic is that of wealth inequality and, relatedly, the potential use of wealth taxation to reduce wealth inequality while also further diversifying the sources of much-needed government revenue.
Today, tax systems across the continent feature a mix of direct taxes on personal and corporate income and indirect taxes on consumption, such as a value-added tax.
A lower income tax rate on Treasury bills and bonds usually attracts more offshore investors to the government debt market, raises competition among market players and cuts the cost of debt repayments incurred by the government every year.
Another brain fart by the South African authorities, this time the tax man, means any repatriated income or capital gains will now be taxed up to 20%.
"Reducing the level of corruption in SA society, and restoring SARS to its former glory will make a huge difference to the level of tax integrity," he said.
National coffers, of course, rely on taxes, mostly based on levels of personal income and on corporate profits.