The legislative branch of the Kenyan government consists of a unicameral National Assembly (bunge), whose representatives are elected by popular vote to serve 5-year terms. The executive branch consists of a chief of state who is both president and head of government. The president is elected by popular vote by members of the National Assembly. The president, in turn, selects a cabinet. The judicial branch comprises a Court of Appeal, a chief justice appointed by the president, and a High Court. The legal system is a complex hybrid of English common law, tribal law, and Islamic law. The military is more or less apolitical, and Kenya boasts one of the most stable political histories in all of east Africa. This record was slightly marred in the early 1990s, when serious ethnic clashes killed thousands and left tens of thousands homeless.
Although KANU, dominated mostly by the Kikuyu and Luo ethnic groups, initially claimed to be socialist, it has long since abandoned this pretense. Indeed, according to Vincent B. Khapoya, author of the African Experience, even in the earliest years of Kenyan independence, KANU promoted capitalist policies. During this period, KANU, which replaced the ethnic federalism of the original post-independence constitution with centralization, banned its major opposition party, the Kenya People's Union (KPU), thereby creating a de facto (in practice) one-party state. In 1982, KANU constitutionally declared a de jure (on paper) one-party state, claiming that this was needed to decisively avoid the effects of "tribalism" (ethnic conflict), supposedly engendered by multiparty politics. Despite the reintroduction of multiparty politics in 1992, the government of Kenya has been headed by the KANU leader, Daniel arap Moi, since the death of Kenyatta in 1978. Moi is currently serving his last constitutional term in office, which is scheduled to end in January 2003.
Some of the other major political parties represented in the National Assembly include the Democratic Party of Kenya (DP), the Social Democratic Party (SDP), the National Development Party (NDP), Forum for the Restoration Democracy-Kenya (FORD-K), and SAFINA. The CIA World Factbook 2000 states that most opposition parties in Kenya are divided along ethnic lines, a factor which enabled KANU to win the 1997 elections despite its failure to garner the majority of votes.
Tax revenue, which accounted for 86.6 percent (KSh129,230) of government revenue in 1997, is the largest source of government income. The 3 largest sources of tax revenue, in turn, are taxes on goods and services, taxes on income and profits, and taxes on international trade. Each respectively accounted for 37 percent (KSh55,279), 33 percent (KSh49,266), and 15.3 percent (KSh22,773) of government revenue in 1997. Non-tax revenue only accounted for 13.4 percent of government income in the same year.
Taxes on companies in Kenya are set at the relatively high rate of 32.5 percent for resident companies and 40 percent for nonresident companies, though certain deductions and exemptions do apply. The income tax system is based on an annual pay-as-you-earn (PAYE) scheme in which a person is taxed progressively on sums of KSh90,240, beginning at 10 percent on the first KSh90,240, and ending at 32.5 percent on the sixth sum of KSh451,200. Those that make less than KSh90,240 are effectively exempted from income taxation. Moreover, a second pro-poor taxation policy includes the exemption of unprocessed agricultural products and processed foodstuffs from the standard value-added tax (VAT) rate of 17 percent on all goods. Some excise tax rates, however, such as the rate of 135 percent on cigarettes and tobacco products, and the 95 percent rate on light beer, are set at extremely high rates. Consequently, these commodities are confined to the enjoyment of the wealthy.