NAIROBI, Kenya — In a major policy shift aimed at easing the financial burden on citizens, National Treasury Cabinet Secretary John Mbadi has announced that the government will not introduce no new taxes in the current fiscal cycle.
Speaking before the National Assembly’s Budget and Appropriations Committee, Mbadi noted that the economic conditions facing Kenyans have not improved enough to justify further tax hikes.
“I want to state that we are not looking at the possibility of increasing tax rates because, again, there is no difference between this year and last year. Kenyans are the same. The rates are the same,” Mbadi told lawmakers.
The Shift: Efficiency Over Increases
The announcement marks a strategic pivot for President William Ruto’s administration, which has faced significant public resistance to aggressive tax measures, most notably during the protests that led to the withdrawal of the Finance Bill 2024.
Instead of raising rates, the Treasury is now focusing on broadening the tax base through internal reforms at the Kenya Revenue Authority (KRA). The goal is to capture more revenue from the existing system by closing loopholes and improving compliance.
Key Pillars of the New Revenue Strategy
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Digitization of the Economy: Mbadi emphasized that as more Kenyans move their businesses and transactions online, the KRA must “deliberately” follow them to ensure revenue is not lost in the digital space.
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KRA Structural Reforms: The Treasury is putting pressure on the KRA to modernize its collection methods and align its operations with the current economic reality.
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Compliance-Driven Growth: By making it easier and more transparent for people to pay their dues, the government hopes to increase the total revenue collected without increasing the percentage charged to individuals or businesses.
Balancing the Budget
The decision to hold tax rates steady comes at a time when the government is under pressure to fund its KSh 4.2 trillion budget and manage a high public debt. However, Mbadi’s stance signals a preference for administrative efficiency over legislative tax increases to maintain social and economic stability.
By targeting a reduction in the fiscal deficit through better management rather than new levies, the Treasury hopes to foster a more predictable environment for investors and relief for Kenyan households.
