Ambale, Caren Akumu2021-03-042021-03-042020http://ir-library.ku.ac.ke/handle/123456789/21764A research project submitted to the Department of Economic Theory in partial fulfillment of the requirements for the award of the degree of Master of Economics (Policy and Management) of Kenyatta University September, 2020Kenya, just like many developing countries is currently confronted by huge fiscal deficits, declining external assistance and huge debt service charges that are adversely affecting the country’s development process. The tax revenue in Kenya keeps performing poorly and unsteadily. The revenue collected from tax does not match the target which creates budget deficits. Increased spending needs and weakening revenue-raising capacities have together created structural budget deficits that have in turn brought about fiscal crises whenever a recession hits. Therefore, of concern to policymakers is how Kenya can attain revenue stability and be able to sustain public expenditures. To do this, there was need to determine buoyancy and elasticity of income tax revenue. It analyzed the buoyancy and elasticity of corporate and personal income tax in Kenya. The study utilizeddata1963 to 2018.The study used ordinary least square regression model to estimate the coefficients. Adjusting data for discretionary changes determined the elasticity estimates. Specifically, the study established that, corporate income taxes are highly buoyant to changes in the national income. This being the position, it is important to understand this relationship as it has a potential of contributing significantly to government revenue. Also, the study noted that buoyancy of personal income taxes were less than one implying that these taxes are inelastic. It is necessary for the government to put in place guidelines that would widen the tax base. The government should for instance put up measures that can be implemented to ensure that all corporations pay taxes due to them without tax evasion. The government should also create an environment conducive enough to facilitate Gross Domestic Product growth. This way, it will be possible to raise more tax revenue.enBuoyancy of Income TaxesElasticity of Income TaxesKenyaThesis