Enhancing Evidence-Based Tax Policy Making through CGE Modelling: A Capacity Building Workshop with KRA, KIPPRA, and IFPRI

By  Alex Oguso, Shadrack Mwatu, Juneweenex Mbuthia

From May 5-9, 2025, the International Food Policy Research Institute (IFPRI) and the Kenya Institute for Public Policy Research and Analysis (KIPPRA) successfully delivered a training of trainers’ workshop under the CGIAR Policy Innovations program for the Kenya Revenue Authority (KRA) and KIPPRA staff. Building on the foundational work of the CGIAR National Policies and Strategies (NPS) and Foresight initiatives, this intensive training equipped participants with the skills to evaluate the revenue and economy-wide impact of tax policy reforms the Kenya Tax Model, co-created by KRA, KIPPRA, and IFPRI in 2024. The training was supported by the United Nations Development Programme (UNDP) under the Country Engagement Plan (CEP), which seeks to align Kenya’s national priorities on financing for development with the Sustainable Development Goals (SDGs) and taxation. The CEP builds on national and regional taxation priorities to support Kenya’s development aspirations as spelt out in the Kenya Vision 2030, the Fourth Medium Term Plan (2023-2027) and expressed in the recent Finance Acts which seek to actualize the Bottom-Up Economic Transformation Agenda.

In its first part, the training introduced participants to key economic modelling tools, with a particular focus on Social Accounting Matrices (SAMs) and their role in computable general equilibrium (CGE) modelling. Sessions covered the construction and aggregation of SAMs from national data sources, calculation of economic indicators, and use of SAMs in hypothesis development. Participants also explored the use of multiplier models, such as Keynesian and Leontief frameworks and their application in understanding how fiscal shocks transmit across different sectors of the economy.

In the second and main part, the training focused on hands-on application of the Kenya Tax CGE Model. Through practical exercises using the Kenya tax model, participants learned to simulate tax policy changes and analyze their economy-wide effects, including revenue outcomes, sectoral shifts, and household welfare impacts. The training also emphasized how to interpret simulation results and apply them in policy evaluation.

In addition, the United Nations Development Programme (UNDP) engagement added further value by providing guidance on strategic communication to enhance uptake of technical findings by policy stakeholders and to improve tax compliance. The UNDP Communication expert shared practical insights on crafting clear, compelling narratives using the data at KRA that can influence decision-making beyond technical circles.

The workshop concluded with strong institutional commitments to continue supporting capacity-building efforts, including advanced follow-up sessions and collaborative modelling initiatives.

While the five-day training significantly advanced participants’ technical skills, it was also clear that further sessions would be beneficial to explore advanced modules in CGE modelling, such as simulating exogenous shocks, refining the Kenya Tax Model, and applying tax administration data to real-time policy analysis. Recommendations from the training included participation from the National Treasury, and establishing a core group of CGE experts within the National Treasury, KRA and KIPPRA to champion continued use of the model.

In summary, the workshop successfully enhanced institutional capacity in CGE modelling and laid a strong foundation for more informed and data-driven tax policy in Kenya. It also marked a milestone in enhancing cross-agency collaboration, with IFPRI/CGIAR, KIPPRA, KRA, and UNDP working together to build a pool of skilled public sector analysts equipped to drive evidence-based fiscal policy making in Kenya forward.

Authors: Alex Oguso is a manager, Research & Tax Modelling Unit, Kenya Revenue Authority (KRA); Shadrack Mwatu is a Senior Policy Analyst, Trade and Foreign Policy Department, Kenya Institute for Public Policy Research and Analysis (KIPPRA); Juneweenex Mbuthia, is a Research Officer, Development Strategies and Governance Unit, International Food Policy Research Institute (IFPRI), based in Nairobi, Kenya.