Browsing by Author "Njaramba, Jennifer"

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    Impact of Tax Reforms on Revenue Productivity in Kenya
    (2014-03-10) Mokua, Nyandieka Kenyanya; Maingi, James; Njaramba, Jennifer
    The implementation of the Kenya vision 2030, coupled with financing expenditures under the devolved government in the new constitution requires enormous resources. The vision requires the government to ensure that the bulk of its expenditures are met from tax revenue and that overall expenditure should be controlled to ensure stable macroeconomic environment. The Government of Kenya continued to carry out tax reforms over the years with an aim of improving taxation efficiency and increasing the amount of revenue raised to finance the ever raising government expenditure. Despite the continuous tax reforms since 1986, the envisaged improvement on tax productivity to Gross Domestic Product Ratio of 28 percent has not been achieved. This study sought to investigate the impact of the reforms that have been undertaken in Income tax, Excise duty, Import duty and sales/Value Added tax on revenue productivity. Income tax is levied on individual and corporate incomes thus as the economy keep expanding the contribution of this category of tax to revenue is bound to increase, assuming the reforms are aimed at broadening the tax base. Similarly, Value Added tax is a consumption tax charged on both local sales and importation, as opposed to import duty, which is levied on the value of imports. Excise duty is levied selectively on particular goods and services. Compared to Import and Excise duties, Value Added tax has more potential to increase revenue through reforms aimed at increasing consumption spending in Kenya. The specific objective of this study therefore was to estimate the effect of tax reforms on buoyancy of Income tax and Value Added tax, as well as estimating the effect of the reforms on elasticities of the tax system. The study was guided by the Tax Modernization Programme of 1986 and the Kenya Vision 2030. Published secondary data was used to analyze the relationship between tax reforms and revenue productivity and before, after piecemeal/policy and during the comprehensive reform buoyancy and elasticities were estimated using regression analysis. The regression result showed that total tax in Kenya was inelastic during the three periods, but it was buoyant during the pre-reform and piecemeal reform periods. The study also showed that the reforms had a positive impact on productivity of income tax, but did not have a positive impact on productivity of Value Added Tax. The positive of reform on the productivity of income tax was as a result of the relative effectiveness of income tax reform that made the tax system simpler and reduced avenues for evasion and corruption, whereas the low elasticity of value added tax might have been caused by tax evasion and collusion between the tax collectors and tax payers. In spite of the good performance of income tax as a result of reforms, further reform needs to be done particularly on the inelastic value added tax. These reforms include: reduction of rates and exemptions, increasing the number of tax collectors, imposing tougher penalties for those found guilty of evasion, strengthening audit skills, taxation of absentee landlords and income from rental houses.
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    Nexus between Participation in Agriculture and Youth Welfare in Bomet County, Kenya
    (Journal of Economics, 2023-09) Kiprono, Kevin; Njaramba, Jennifer
    Kenya’s youth unemployment rate stands at 39 percent, forming the largest group of the unemployed in the country. The cohort possesses innovative behavior, minimal risk aversion, less fear of failure, less conservativeness, greater physical strength and greater knowledge acquisition propensity. The agriculture sector offers a huge opportunity for the creation of employment for the youth in the country. Despite the vital role the agricultural sector plays in the economy of Kenya, youth are yet to fully exploit its potential. Like in other countries, literature posits that youth participation in agriculture is low and major determinants of participation in agriculture are; education level, access to land, access to finance, household size and access to market. Youth perceive agriculture as a career of last resort that has low monetary benefits. The study sought to establish participation in agriculture and its effects on the welfare of the youth in Bomet County. A sample of 399 youths were picked as a representative sample. The study employed frequencies and percentages in analyzing the descriptive statistics of the study. Logistic regression was adopted in estimating the model. The study undertook various diagnostic tests before estimating the models to ensure that the model is fit in determining the relationship of study variables. The predicted probabilities for youth to participate in agricultural activities was 32.0 percent. The results from the study also showed that participating in agriculture improved welfare majorly through increased income and food. Model results established that marital status, university education, land size, financial access, access to ICT infrastructure, market distance, household size and agricultural training significantly influenced welfare of youth practicing agriculture. The study recommends that the government creates financial credit specifically tailored for majority of the youth who do not have the required collateral. There is also a need for the government to build more agricultural training institutes so that youth can learn diverse agricultural productions.
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    The relationship between informal sector size and economic growth in Kenya
    (Kenyatta University, 2014) Muthyoi, Alexander; Njaramba, Jennifer; Manyasa, E.O.
    Over the years, there has been an ongoing debate in the literature on the expansion of informal sector in Less Developed Countries. In Kenya, just like other less developed countries, informal sector commonly known as Jua Kali, has been playing a significant role in job creation. The sector also plays a key role in contribution to the country's Gross Domestic Product, provision of certain goods at cheap prices hence leading to household savings. The sector also provides competition to formal sector leading to cheap prices and innovativeness. In 1998, the informal sector contributed 18.4% of the country's GDP. The purpose of the research was to explore the contribution of Informal Sector size in economic growth in Kenya from 1980 to 2010. The scope of the study covered the period from when the government of Kenya officially came up with comprehensive policy framework on informal sector. Specifically, this study evaluated the relationship between the real Gross Domestic Product per capita growth and growth of informal sector employment in the country. To achieve this objective, the study used time series data obtained from government of Kenya official documents. The study showed that there is a relationship between the country's informal sector size and economic growth. The findings of the study would assist in policy formulation on the growth of the informal sector size.