Taxing Wealth: A New Tool for Tackling Inequality in Kenya?

By Mary Ongore, Senior Legal Manager, Sustainable Finance

Photo credit: KHRC

Kenya has a strikingly high level of income and wealth inequality. In 2024, the richest 10% of the population received 47.2% of national income before taxes, while the lowest 50% received just 14.2%. The wealth gap is even wider: the top 10% held 60.4% of overall net personal wealth, compared with only 4.4% held by the bottom half of the population.

Looking at this a different way, Kenya ranks among Africa’s top five countries for high-net-worth individuals, with 6,800 dollar-millionaires (people with assets of at least US$1 million) and 16 centi-millionaires (people with assets of at least US$100 million). If a 1.5% net wealth tax were applied to the dollar-millionaires - assuming each had net assets of US$1 million -,and a 2% tax were applied to the centi-millionaires, it could raise US$134 million a year. That is equivalent to about 10.18% of Kenya’s health budget.

Those figures make the case for a serious conversation about wealth taxation. Some 45.5% of the population live on less than US$3 a day, while debt servicing amounted to approximately 68% of ordinary revenue in 2024. A well-designed wealth tax could help reduce inequality, fund public services and infrastructure, and lessen reliance on unsustainable debt.

Kenya already taxes some forms of wealth through property tax and capital gains tax, but these measures do not capture the true value of large real estate and financial investments. That is why civil society organisations have called for the introduction of a wealth tax.

This is the context in which the Kenya Human Rights Commission asked International Lawyers Project to prepare a wealth tax compendium. Our task was to explore the economic case for wealth taxation, the administrative hurdles involved, current global trends, and the design choices needed to make enforcement work in practice. In September 2026, I presented the compendium to officials from Kilifi County during a capacity-building session.

Designing an Effective Wealth Tax

So, what would an effective wealth tax actually look like? During the session, I highlighted several lessons from international best practice. The first questions are practical ones: which assets should fall within the tax, what rate should apply, and where should the threshold for high-net-worth individuals be set? Relatively low rates and high thresholds are generally fairer and easier to administer.

Good design also depends on knowing what is being taxed. That means investing in robust asset-valuation systems that can identify high-net-worth individuals, trace ownership and support compliance. A wealth database could bring together information from existing land, company and beneficial-ownership registries, alongside data held by financial-reporting institutions. Memoranda of understanding, information-sharing agreements or legislation could provide the framework for those exchanges.

Of course, collecting this kind of sensitive personal and financial information brings real privacy concerns. Strong safeguards must be built in from the start, supported by legislation that respects constitutional privacy rights and the Data Protection Act, 2019.

It is equally important to test the idea before rolling it out. A thorough impact assessment and cost-benefit analysis can show both the likely economic effects and the administrative cost of compliance. A phased introduction would then give the revenue authority and taxpayers time to adjust.

Conclusion

Kenya is not alone. Across Africa, very few countries tax an individual’s total accumulated wealth. Our session showed just how much potential wealth taxation has to raise revenue at a time of persistently high debt and shrinking fiscal space.

But let’s be clear: a wealth tax is not a silver bullet. Its success depends on thoughtful design, strong administration and political backing. It is one part of a much bigger effort to advance tax justice, strengthen domestic revenue and reduce inequality. Given Kenya’s widening economic divide and severe fiscal pressures, I believe wealth taxation will become an increasingly important part of the country’s development debate.

At ILP, our Sustainable Finance team works alongside partners pursuing tax justice and tackling inequality. Wealth taxes, when carefully designed and fairly administered, can help move us towards a more just world - one in which everyone can enjoy their social and economic rights.

International Lawyers Project (ILP) provides pro bono legal support to more than 100 civil society organisations, communities and individuals each year. Through our Sustainable Finance programme, ILP works with our partners to promote economic justice through fairer more equitable taxes.

If you need assistance or advice in this area, please contact us at contact@internationallawyersproject.org to discuss how we can help.