Why lighter tax burden on workers is good for the economy

The purchasing power of employed Kenyans is estimated to have declined by about 12 per cent, eroded by rising living costs and heavier statutory deductions. [Courtesy]

Kenya’s economic trajectory over the next decade will be shaped not only by how much the government spends, but by how effectively it empowers citizens to generate and circulate wealth. At the centre of this conversation lies a central but straightforward idea: a lighter tax burden on the payslip can ultimately lead to stronger economic growth and higher tax revenues for national development.

Today, many Kenyan workers are feeling squeezed. Over the past five years, the purchasing power of employed Kenyans is estimated to have declined by about 12 per cent, eroded by rising living costs and heavier statutory deductions. When workers take home less, and when what they take home buys even less, the immediate consequence is tighter household budgets and weaker demand across key sectors of the economy.