A new global report revealed that approximately 100 millionaire investors relocated out of Kenya in 2022 over political tension and a high taxation rate.
Henley Private Wealth Migration Report 2023, published on Tuesday, June 13, detailed that wealthy individuals flew out of Kenya searching for countries with fewer taxation rates.
This signalled the ripple effect caused by President William Ruto's administration keen on raising taxes to collect more revenue.
The report further indicated that 100 millionaires were also set to leave the country in 2023, pointing out that investors are worried about Kenya's current state of affairs.
British journalist and Rector of the Institute for Human Sciences in Vienna, Misha Glenny, stated that High-Net-Worth Individuals (HNWI) are primarily drawn to areas of personal freedom and political stability.
HNWIs are individuals who have amassed Ksh139 million ($1 million) or more in their possession.
"Political stability is the key metric for those selecting where they want to live, together with low taxation regimes and personal freedom. Until Russia – Ukrainian war comes to an end, both countries will continue to export HNWIs, and this will remain the single largest driver of relocation," read part of Glenny's remarks as quoted in the report.
Sunita Singh-Dalal, a partner at Private Wealth and Family Offices at Hourani, also listed rising debt, a dysfunctional healthcare system and a high-crime rate as factors driving millionaires out of the country.
Political volatility during the electioneering period before the August 9, 2022, General Election led to uncertainty among most tycoons who sought to shift their investments to other countries.
The report revealed the latest inflows or outflows of several dollar millionaires in 2022 and the projection for the year 2023.
According to Henley Private Wealth Migration Report 2022, Kenya was projected to increase the number of HNWI by 50 per cent for the next ten years.
In 2021, the number of Kenya's dollar millionaires grew by 2 per cent.
Number of Dollar Millionaires
In the latest Africa Wealth 2023 report by Henley & Partners, Kenya was ranked the fourth wealthiest country in the continent - possessing 7,700 dollar millionaires and 15 centi-millionaires (individuals whose wealth amount to Ksh13.6 billion).
Some of the factors that encouraged the growth of wealth in the country included a well-developed banking system, robust ownership rights, development of key sectors, and media freedom.
Ruto's Tax Plan
The Kenya-Kwanza administration intends to raise an additional Ksh211 billion as revenue through the tax policy changes stipulated within the Finance Bill 2023. This is four times more than the Finance Act 2022 - signalling Ruto's direction in curbing the country's debt crisis.
In September 2022, the President tasked the Kenya Revenue Authority (KRA) to collect Ksh3 trillion by the end of June 2022/2023. The Authority was also directed to double the amount in the next five years.
