New tax policies needed for hustlers to thrive

Photo courtesy: Johnny Miller, Slumscapes project more

Oxfam’s new data shows Kenya is far from the Kenya Kwanza’s 2022 promise of a fair and prosperous nation. The 2025 Inequality Report offers policies for those leaders still committed to that vision.

Last week’s State of the Nation Address confirmed the government has no strategy to reduce the debt-driven erosion of essential services or lift most households from poverty. Promises of universal healthcare and affordable housing remain stalled by funding gaps and controversy. Over-taxation is pushing hustlers underground. Instead of bottom-up transformation, the economy seems to have bottomed out.

Oxfam’s 2025 ‘Inequality Crisis’ report demonstrates wealth is concentrating. 125 Kenyans own more than 77 per cent of the population. Lazy and regressive taxes like VAT are hitting low-income earners hardest. Inflation is 27 per cent higher for them than higher income earners. Food insecurity is up 71 per cent, food costs have risen 50 per cent in the last five years and women earn Ksh 65 for every Ksh 100 men earn.

Universal health care remains a pipedream. The Social Health Insurance Fund remains unaffordable for most, only 8 per cent of us contribute and fewer benefit. Only the nation’s global creditors seem to have guarantees of regular payments.

Despite the comprehensive implementation of Competency-Based Curriculum, funding for public education, a core equality accelerator, has plummeted. Today, our 10 million learners make do with 18 per cent less than the Kibaki/NARC government provided back in 2003. Consequently, the poorest children get five years less years of schooling than the richest.

Speaking at the Kiota School prize-giving ceremony this week, I was struck by the implications of a good education for citizenship and the right to equality. Not just academic literacy, but civic, financial, emotional literacy starts in our homes and schools. Children learn fairness sharing toys, food and spaces. They learn responsibility by helping, and empathy by supporting others in need. Our homes and classrooms are where they learn to use the internet safely and creatively.

Deepening inequality is splitting the nation’s households and schools into two extremes. Those who have access to security, economic opportunities and digital technology, and those crashing under the weight of regressive taxation and economic policies. Fortunately, Oxfam’s report goes beyond criticism. It offers practical policy solutions that could rescue Kenya Kwanza’s vision if implemented.

As the national administration turns to the 2026/7 budget, it needs to raise education, health and social protection budget lines by 20, 15 and 1 per cent of GDP respectively. Rather than exporting Kenyans to semi-slavery, xenophobic or racist economies, can Kenya Kwanza expand public works programmes and increase paid maternity leave to 26 weeks.

To pay for this, the state must transform the tax regime. Apply a 14 per cent wealth tax on dollar millionaires and progressive bands on the very wealthy. Both state and non-state actors must advocate for debt relief before the inevitable default. The IMF and the World must start to factor in inequality indicators as valid macro-economic triggers.

Corruption and selective action on the corrupt must stop. Now the Auditor General has told us there are Sh 11 billion irregular transactions on the e-Citizen platform and the courts have ruled the State must stop using it, will they? Must we wait until the greed of the National Assembly outstrips the patience of the Executive before it  stops the culture of “bribes for bills”?

It is the system that has been built to serve a few that fuelled young citizens’ anger over the past year. Student Mercy Tarus and businessman Morara Kebaso vividly described the extent of the rot in 2024. Retired nurse Grace Njoki and MBA student Nelson Amenya blew the whistle on a failing health system and massive dubious procurement deals. Digital coder Rose Tunguru Njeri created a non-violent way for leaders to hear from their electorate and not repeat that disastrous 2024 Finance Bill. Counter-productively, the State has tried to silence rather than act on the many sentinels who have spoken up. Will Kenya Kwanza act on Oxfam’s policy lifeline or repeat last year’s crisis?

The clock ticks.

This opinion was also published in the Saturday Standard, 29 November 2025. 

The Oxfam Inequality Report can be read here