Abstract: The relationship between tax revenue and Gross Domestic Product (GDP) is a critical aspect of fiscal policy and economic development in Kenya. This study examines the impact of GDP growth and unusual economic circumstances on total tax revenue over the period from 1980 to 2020. The research adopts a quantitative approach and utilizes secondary data from various government publications and international organizations. The results reveal that GDP growth has a positive and significant effect on total tax revenue, with an elasticity of 51.9%. This indicates that an increase in GDP generally leads to a proportional increase in tax revenue. However, some unusual economic circumstances negatively affect tax revenue. Booms and peaceful elections were found to have a significant impact, reducing total tax revenue by 5.87% and 3.52%, respectively. The study's significance lies in providing valuable insights for policymakers, tax authorities, and researchers in Kenya. To manage the impact of unusual economic circumstances on total tax revenue, the government should focus on policy options that enhance the economy's resilience and flexibility through managing the unusual economic occurrences. The study recommends that policymakers carefully consider the effects of booms and peaceful elections on tax revenue and design appropriate strategies to maintain buoyancy between GDP and total tax revenue. Overall, this study contributes to the existing literature on tax revenue, GDP, and economic shocks in Kenya. The findings can inform evidence-based policymaking and promote a stable and sustainable revenue base for the country's economic growth and development.
Keywords: Total Tax Revenue, GDP, Unusual Economic Circumstances.
Title: Tax Revenue, GDP and unusual circumstances: The case of Kenya
Author: Emmah Nyaboke Machogu
International Journal of Social Science and Humanities Research
ISSN 2348-3156 (Print), ISSN 2348-3164 (online)
Vol. 13, Issue 3, July 2025 - September 2025
Page No: 24-32
Research Publish Journals
Website: www.researchpublish.com
Published Date: 05-July-2025
