Why a 5pc cut across PAYE bands is powerful economic stimulus

Over the past few months, there has been considerable debate on the impact of tax reliefs for workers. The discussion has largely centred on two perspectives: a fiscal stability standpoint, which emphasises the importance of government revenue, and a growth-oriented perspective, which highlights how tax reliefs can boost consumption and stimulate economic expansion.

In Kenya, there has been a steady trend toward scaling up income taxation rather than production taxation, even though the latter is a more sustainable source of revenue.