Kenya Drops Tax Hikes in New Budget, Focuses on Reforms

In his maiden Budget speech, Treasury Cabinet Secretary John Mbadi has announced that the 2025 Finance Bill will avoid new taxes or rate hikes, a deliberate shift aimed at addressing public outrage sparked by previous tax proposals.

Mbadi said the 2025 Finance Bill would instead raise $230 million in revenue through reforms, improved compliance, and rationalisation of tax incentives. The bill also includes sweeping amendments to streamline tax administration and support economic recovery. This marks a shift from last year’s budget, which sparked national outrage due to controversial tax increases that burdened households and businesses.

Mbadi issued a stark warning over Kenya’s rising public debt, urging for tighter financial discipline, strategic planning, and more efficient revenue mobilization to prevent a looming fiscal crisis. The government faces growing economic challenges, including the cost of living crisis that affects millions of Kenyans, high unemployment, and public debt.