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The informal sector in Kenya plays a significant role in the economy and is said to account for close to 50% of Gross Domestic Product(GDP). The Government of Kenya has been seeking ways to broaden the tax base and consequently net in those operating in the informal economy.
However, there are still certain taxes such as VAT that are applicable to all and considered regressive in nature. With the devolved system of Government in Kenya, County Governments have also been seeking ways to enhance and broaden their revenue base by levying certain types of taxes many of which have an impact on small businesses in the counties.