A new report from a Kenyan state-backed think tank indicates that the current 16 per cent Value Added Tax (VAT) rate might be compelling businesses to shift towards operating within the informal sector.

• The 16 per cent VAT rate is cited as a potential driver for businesses to move to the informal sector.
• The findings come from a state-backed think tank in Kenya.
• This suggests a significant challenge for formal businesses and tax collection in the country.