- Treasury Cabinet Secretary (CS) John Mbadi explained that while it is a constitutional requirement to table a Finance Bill annually, tax hikes are not mandatory
- Mbadi revealed the exchequer had revised downwards the tax projections for the 2025/2026 FY from KSh 3.018 trillion to KSh 2.835 trillion
- The Cabinet approved the KSh 4.2 trillion 2025/26 Budget Policy Statement (BPS), which will now be forwarded to Parliament for debate
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Kenya’s National Treasury could maintain the existing tax rates in the Finance Bill 2025, following anti-government protests against the Finance Bill 2024.
Source: Twitter
Is it a must to table the Finance Bill in Kenya?
Treasury Cabinet Secretary (CS) John Mbadi explained that while it is a constitutional requirement to table a Finance Bill annually, tax hikes are not mandatory.
While addressing the public outside Treasury buildings, the CS noted he was mulling tabling the Finance Bill 2025 without changes to current tax rates.
“There is a misconception in this country that you need a new Finance Bill all the time to finance the budget. That is not true. Even without a Finance Bill, we have tax rates. The bill only varies the rates but we have a legal framework for all taxes. We can use the same tax rates to raise revenue to finance this budget,” Mbadi expounded.
Mbadi revealed the exchequer had revised downwards the tax projections for the 2025/2026 FY from KSh 3.018 trillion to KSh 2.835 trillion.
“It is a constitutional requirement that every year we must have a Finance Bill. What is not a must is increased rates of taxation. No one says that the bill must always increase taxes. It can decrease or remain the same, but we must produce one, however thin it is,” the CS said.
What’s the estimated budget for the 2025/2026 FY?
The Cabinet approved the KSh 4.2 trillion 2025/26 Budget Policy Statement (BPS), which will now be forwarded to Parliament for debate.
It includes KSh 3.09 trillion for recurrent spending, KSh 725.1 billion for development, KSh 436.7 billion for county transfers, and KSh 5 billion for the Contingency Fund.
The Cabinet also approved the 2024/25 supplementary estimates, allocating an additional KSh 344.8 billion for recurrent spending and development projects.
Further details on the proposed budget reveal a proposed shareable revenue of KSh 2.8 trillion under the Division of Revenue Bill 2025.
This includes KSh 405.1 billion for county governments as their equitable share and KSh 10.6 billion for the Equalisation Fund.
Ruto’s administration intends to borrow KSh 759.4 billion in the 2025/2026 financial year (FY) to plug the budget deficit.
What to know about Kenya’s taxes
- KRA collected KSh 1.243 trillion in the first half of the 2024/2025 financial year, representing a 4.5% rise from KSh 1.189 trillion collected during a similar period in the previous year.
- President William Ruto’s Cabinet noted the broad-based government will focus on six priorities in the upcoming fiscal year, including expanding the tax base.
- Mbadi said there will be no additional taxes on employment income in the 2025/2026 FY.
Source: TUKO.co.ke