When Louis Armstrong sang What a Wonderful World in the 1960s, he offered a timeless vision of a future filled with hope and a world in which beauty and dignity belonged to all. Yet, more than half a century later, Armstrong’s lyrical utopia remains just that: a utopia. According to the World Inequality Database, the top 10% of Kenyans control roughly 63% of national wealth, while the bottom half owns only 4%.[i] This gap is deepened by a regressive tax structure in which consumption taxes dominate and weigh heaviest on the poor while the wealthy often reduce their tax exposure.[ii] Against this backdrop, a wealth tax has emerged as a possible tool for addressing structural inequality and improving fairness in the tax system.[iii] But potential alone is not enough.
Organization for Economic Co-operation and Development (OECD) experience shows that most countries that once implemented wealth taxes later repealed them, mainly due to the inadequate capacity to enforce them. [iv] In this blog, Daniel Murakaru, Legal Research Fellow at the Institute of Public Finance argues for three key steps Kenya must take before introducing a meaningful wealth tax: strengthening enforcement through voluntary disclosure programmes; developing a centralised wealth database; and enhancing international cooperation to address offshore capital mobility.
- Voluntary Disclosure Programmes
A voluntary disclosure programme is an essential first step, offering the wealthy a structured opportunity to declare assets in advance while building the trust, transparency and cooperation necessary before introducing a wealth tax. Grounded in the principle that effective taxation relies on voluntary compliance, Kenya should first create an environment that encourages wealthy taxpayers to disclose their assets and align with existing tax obligations before introducing a wealth tax.
Currently, no structured programme exists to promote self-declaration, and even the High Net-Worth Individuals (HNWI) Unit established has struggled to secure full disclosure due to persistent structural and administrative weaknesses.[v] A dedicated voluntary disclosure programme for HNWI could seal this gap by enhancing administrative legitimacy, improving compliance levels, and building trust through limited amnesty or reduced penalties for early disclosure. Kenya can also draw lessons from East Africa neighbors, Uganda and Rwanda, where soft enforcement strategies, such as compliance education, moral persuasion, and recognition of compliant taxpayers, have proven effective.[vi]
- Developing a Centralized Wealth Database
Kenya should also prioritise the establishment of a centralised and comprehensive wealth database to provide the foundational data needed to verify declarations under any future wealth tax. For a wealth tax to function effectively, it must be backed by a unified data system which enables accurate verification of the wealthy’s asset disclosures. For instance, Switzerland’s and Norway’s success in wealth tax can partly be attributed to their centralised wealth database for verifying voluntary declarations made by the wealthy.[vii] At present, Kenya lacks an integrated wealth database as wealth related data is dispersed across multiple registries, including the lands and companies registry, and various financial reporting systems thus making verification slow, cumbersome and incomplete.
To address this fragmentation, Kenya should develop a consolidated wealth information platform that brings together all asset ownership. This data can be held and managed by the government, building on existing systems such as the Business Registration Services (BRS), which is already used to verify ownership of moveable assets and companies. The BRS platform can thus be further integrated to capture beneficial ownership details, trusts, and other opaque structures often used to obscure wealth. Moreover, the collection, sharing and use of this data must be governed by the Data Protection Act, 2019 to ensure accuracy, lawful use and the protection of personal information.
- Enhance International Cooperation
Finally, Kenya should also invest in developing protocols and mechanisms for cross-border data exchange by aligning with the OECD’s Common Reporting Standard (CRS), a key step in curbing capital flight and ensuring that offshore wealth is captured in any future wealth tax. Wealthy individuals often structure their assets across jurisdictions to minimize tax liability. Introducing a wealth tax without mechanisms to identify foreign-held assets would leave significant gaps and encourage capital flight. The CRS addresses these challenges by enabling the automatic exchange of financial account information among participating countries yielding approximately EUR 126 billion in additional revenue globally between 2009 and 2022.[viii] Kenya has begun the process of alignment with the CRS, but full compliance will require responding to OECD peer comments by, among other items, finalizing exchange agreements with all committed jurisdictions to curb offshore evasion.[ix]
In conclusion, Armstrong’s vision of a “wonderful world” remains a powerful reminder of the fair and inclusive society Kenya aspires to build. A wealth tax could contribute to that future, but only if introduced on a strong enforcement foundation.[x] Kenya must therefore adopt a phased approach, beginning with the Kenya Revenue Authority (KRA) implementing a voluntary disclosure programme for the HNWI, alongside a policy decision by the State to establish a centralised wealth database housed within the BRS and the full adoption of the global information-sharing frameworks by the State. These foundational measures should precede the introduction of a wealth tax.
References
[i] World Inequality Database, (2023) https://wid.world/country/kenya/.
[ii] World Bank Group, “Kenya Economic Update: Special Focus on Poverty and Distributional Impacts of Fiscal Policy in Kenya” (May 2025) ed 31, p 19.
[iii]Dr. Layla Latiff, “The Potential for Taxing Wealth in Kenya” (2024). Can be accessed at, https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4920275.
[iv] OECD, “The Role and Design of Net Wealth Taxes in the OECD,” (2018) OECD Tax Policy Studies, No. 26, OECD Publishing, Paris
[v]Dr. Layla Latiff, “The Potential for Taxing Wealth in Kenya” (2024). Can be accessed at, https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4920275.
[vi] G Occhiali, G Mascagni and others, “Taxing the Wealthy in Lower-Income Countries: Why it’s Important, and How to Do it” (January 2025) ICTD Policy Brief No 14. J Kangave, “Tax Compliance of Wealthy Individuals in Rwanda” (2020) Joint Paper Between RRA and ICTD. R Waiswa, J Kangave and Others, “What Can we Learn from the Uganda Revenue Authority’s Approach to Taxing High Net Worth Individuals?” (2018) ICTD Working Paper 72.
[vii] OECD, “The Role and Design of Net Wealth Taxes in the OECD,” (2018) OECD Tax Policy Studies, No. 26, OECD Publishing, Paris; Thor O. Thoresen, M A K Ring; O E Nygard and J Epland, “A Wealth Tax at Work” Statistics Norway; David Seim, “Behavioural Responses to Wealth Taxes: Evidence from Sweden” (2017) 9 American Journal: Economic Policy.
[viii] Global Forum on Transparency and Exchange of Information for Tax Purposes, “Enabling Global Progress in Tax Transparency: 2024 Global Forum Capacity Building Report” (2024) OECD.
[ix] OECD (2025), “Peer Review of the Automatic Exchange of Financial Account Information 2025 Update” OECD Publishing, Paris. Can be accessed at https://doi.org/10.1787/bbf150e4-en
[x] Institute of Public Finance, “Tax the Rich!”: Can Kenya Get Wealth Taxation Right?” (2025).
This blog has been authored by Daniel Murakaru, Legal Fellow at the Institute of Public Finance
