Publication: The Political Economy of Post-Colonial Taxation in Kenya, 1973 - 1995
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2015
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International Institute for Science, Technology and Education
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Abstract
The Kenyan tax system as we find today is a British colonial legacy that was closely bound up with the
development of the system of political governance and the maintenance of law and order. Besides, taxation
helped transform a subsistence economy into one where money and a market system determined the exchange
process. In short, the introduction of taxation changed the mode of exchange and the entire fabric of African
society and reordered it to meet the needs of a capitalist economy. Independence in 1963 did not alter the
parasitic nature of the colonial state. Subtle and opportunistic ways continued to be used to extract taxes from the
peasants and the working class. GPT impoverished the poorest members of society who had no definite source of
income. In 1973, after slightly more ten years of implementation, GPT was abolished altogether as a source of
revenue for both the central and local government. It had been a brusque form of direct taxation on Africans. The
abolition released the non-salaried from the payment of taxes, which basically was more burdensome to the poor
than to the rich. But for those in paid employment, there was introduced a new form of ‘pay-as-you-earn’
(PAYE) system that taxed an individual’s income according to how much one earned.
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Kenya, Post-colonial taxation