By Kepher Otieno - Reporter
Kenya, 9 December 2025 - Kenya’s government has assured citizens that it does not intend to impose new high taxes amid growing concerns over the rising cost of living.
In a candid discussion with the media, Cabinet Secretary for the National Treasury John Mbadi emphasised the need for public participation in the budget process, giving Kenyans until 31 December 2025 to submit suggestions, detailed justifications, or evidence for any proposed taxes in the 2026/27 financial year.
“We remain mindful of the constitutional threshold for public participation in budget-making, and Kenyans’ voices will be central to our decisions,” Mbadi stated.
The assurance comes against a backdrop of heightened public sensitivity to tax increases.
In June 2024 President William Ruto withdrew a controversial finance bill following protests, particularly from Gen Z, who argued the measures disproportionately affected young people and SMEs.
Despite such setbacks, the Kenya Revenue Authority (KRA)continues to face pressure to raise significant revenue, with a target of KSh 3.4 trillion for the upcoming fiscal year.
This follows the accumulation of public debt, which has risen by KSh 2.85 trillion since September 2022 prompting the Treasury to explore new avenues for revenue without exacerbating citizen hardship.
To strengthen compliance, KRA plans a digital crackdown on SMEs, leveraging real-time data from electronic invoices and customer records. Analysts say the move is designed to curb tax evasion, which has historically undermined revenue collection and fairness in the system.
While the initiative could boost government coffers, critics caution that smaller businesses may struggle to adapt to stringent reporting requirements, particularly as inflation and operational costs remain high.
CS Mbadi’s call for citizen input reflects a broader trend of participatory budgeting and transparency.
Mbadi by inviting Kenyans to provide evidence-based feedback on potential tax measures, the government aims to balance fiscal responsibility with socio-economic realities.
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Observers note that this approach could help avoid unpopular blanket tax hikes and ensure that new levies are targeted, justified, and constitutionally compliant.
Economic analysts warn that the Treasury faces a delicate balancing act. On one hand, Kenya must mobilise sufficient revenue to service growing debt and fund public services.
On the other, high taxation risks stifling consumption, discouraging investment, and fueling public discontent.
“The government has to strike a fine balance between revenue mobilisation and protecting the citizen from over-taxation,” said an economist familiar with the budget process.
The 2026/27 budget will also likely be shaped by ongoing global and domestic pressures, including inflationary trends, currency fluctuations, and the need to support SMEs and vulnerable households.
KRA’s focus on digital monitoring, if implemented effectively, could modernise tax administration and increase compliance without introducing new rates.
Yet, its success will depend on clear guidelines, capacity building, and robust enforcement mechanisms.
As Kenyans prepare to submit feedback before the 31 December 2025 deadline, Treasury officials stress that public engagement is more than procedural—it is essential for fiscal legitimacy.
Mbadi emphasised, “Our priority is to ensure that any new tax measures are evidence-based, fair, and do not overburden citizens already grappling with the high cost of living.”
How effectively the government balances these competing demands will shape public confidence in the upcoming budget and influence Kenya’s broader economic trajectory in the years ahead.
