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Although Kenya has recorded some improvements in the last four years, including an increase in productivity, Kenyan firms still face an adverse business environment. The central objective of this report is to identify the main impediments to productivity growth faced by Kenyan firms. The top constraints identified by the Kenyan managers were tax rates, access to finance, corruption, security, infrastructure services (electricity and transportation), and business licensing.
Kenya has reduced the corporate tax rates in recent years. Nevertheless, objective indicators suggest that the tax burden in Kenya remains higher than in most comparator countries. Although a more detailed analysis of the tax burden in Kenya is recommended, one potential impact of a high tax regime is higher evasion, as well as the presence of a larger informal sector.
Although Kenya has recorded some improvements in the last four years, including an increase in productivity, Kenyan firms still face an adverse business environment. The central objective of this report is to identify the main impediments to productivity growth faced by Kenyan firms. The top constraints identified by the Kenyan managers were tax rates, access to finance, corruption, security, infrastructure services (electricity and transportation), and business licensing.
Kenya has reduced the corporate tax rates in recent years. Nevertheless, objective indicators suggest that the tax burden in Kenya remains higher than in most comparator countries. Although a more detailed analysis of the tax burden in Kenya is recommended, one potential impact of a high tax regime is higher evasion, as well as the presence of a larger informal sector.
Table of contents
Overview
Chapter 1. Competitiveness of Kenyan Firms
Overview
Labor Productivity
Unit Labor Costs
Total Factor Productivity
Chapter 2. Business Climate
Introduction
Tax Rates
Corruption
Crime
Tax Administration
Business Licensing and Permits
Chapter 3. Access to Finance
Access to Finance from an International Perpsective
Effect of Firm size on Access to Credit
Characteristics of Loan Products
Loan Applications and Rejections
Chapter 4. Labor Markets and Human Capital
Worker Skills
Labor Regulations
Wages
Absenteeism
Chapter 5. Microenterprises in Kenya
Registration Characteristics
Benefits of Formality: Access to Finance and Land
Costs of Formality: Taxes, Burden of Inspections, and Business Licensing
