Prepared by Davina F. Jacobs.
Kenyan authorities sought to encourage private sector investment by reducing taxes. Their original aim was to reduce the tax burden to close to 24 percent of GDP by 1999/2000.
See N. H. Ngari, “Tax Reforms and Revenue Productivity in Kenya” (unpublished; Lilongwe, Malawi: University of Malawi, 2000).
See Kenya Revenue Authority, VAT Micro-Simulation Model (Nairobi, Kenya: Kenya Revenue Authority, 2002).
This ratio is used as a measure of VAT performance and is defined as the ratio of VAT revenue to GDP divided by the VAT rate. An efficiency ratio of 0.33 means that a 1.0 percent increase in the VAT rate would generate an increase of about 0.33 percentage point of GDP in VAT revenue (Liam Ebrill and others, The Modern VAT (Washington: IMF, 2001).
The group of emerging market countries was selected on the basis of the availability of data and comprises South Africa, Turkey, Israel, Brazil, Chile, Colombia, Peru, and Venezuela.