100 tycoons with a net worth of over Ksh150 million are projected to leave the country in 2023 owing to high taxation among other reasons as documented in the Henley Private Wealth Migration 2023 report.
According to the report - released on Tuesday, June 13 - 100 tycoons of similar net worth left the country in 2022.
Henley and Partners also documented that the migration of tycoons was informed by other factors such as political instability.
Mauritius and Morocco are among the countries becoming lucrative for the super-rich in Africa - taking the glory from former big players like Kenya and South Africa.
"Political stability is the key metric for those selecting where they want to live, together with low taxation regimes and personal freedom," read the report in part.
Kenya as a Lucrative Destination
In recent years, Kenya has been a lucrative destination for wealthy individuals especially those from Africa.
According to the Wealth Report 2023 by real estate company, Knight Frank, Kenya emerged as the second favourite destination where the super-rich were likely to buy a home.
Consequently, the real estate company detailed that the value of palatial homes in Nairobi grew by 3.8 per cent.
Ruto Taxation Proposals
Notably, the migrations of the wealthy out of Kenya were projected at a time when President William Ruto's administration unveiled its Ksh3.6 trillion budget with new proposals on taxation.
- Housing Fund
Among the taxation measures introduced that will see top earners pay more in taxes is the proposed 1.5 per cent Housing Fund
Initially, the government had proposed a 3 per cent salary deduction with the maximum contribution capped at Ksh2,500.
Employees are also expected to match the contribution of their employees meaning that tycoons with companies will spend more in paying taxes.
- Increased PAYE
On the other hand, the government in the Finance Bill proposed a 35% Pay As You Earn for individuals who earn above Ksh800,000.
Previously, PAYE was deducted at a rate of 30 per cent of gross salary.
- NHIF
On the other hand, proposals are underway to have employed Kenyans pay 2.75 per cent of their gross salary to the National Health Insurance Fund (NHIF).
The National Health Insurance Fund 2023 Regulations are due for debate.
Ruto's Reprieve for super-rich
Despite the high taxation on proposals for the super-rich, the government - in the Finance Bill 2023 - proposed a waiver on the aircraft import tax.
Amid opposition from a section of Kenyans on the move, the President explained that the waiver would in the long run be beneficial to Kenyans as aircraft owners were shifting base to other nations.
"Wilson Airport, I think, is the third or fourth busiest airport in Africa and its main work is repair and maintenance.
"We have a very big ecosystem of engineers and people who work in the aeronautical field who had shifted base to Tanzania and Uganda because we imposed these taxes," he stated then.
