Kenya’s government has said it will not introduce new taxes or increase current ones in the 2025/2026 budget. This announcement comes after last year’s deadly protests forced President William Ruto’s administration to abandon major tax hikes and face strong public backlash.
The country’s Finance Minister, John Mbadi, made the announcement during a live television programme on Tuesday evening. He explained that this year’s finance bill will focus more on improving tax collection and closing loopholes rather than raising tax rates.
Mbadi said, “The finance bill doesn’t have to always adjust tax rates upwards. The finance bill of this year is more on tax administration and trying to seal the loopholes and also make tax collection efficient.”
This development follows last June’s violent demonstrations, led mainly by young people across the country, in response to tax increases proposed by the government. The protests turned deadly, with more than 50 people reportedly killed in clashes with security forces. As a result of the unrest, President Ruto was forced to cancel plans to raise an estimated 346 billion Kenyan shillings (about $2.68 billion).
The tax hike withdrawal led to delays in Kenya’s loan programme with the International Monetary Fund (IMF), as revenue expectations were not met. Kenya, like many African countries, is under pressure to meet loan conditions while balancing social and economic tensions at home.
Despite the promise not to introduce new major taxes, the government is still hoping to raise between 25 to 30 billion shillings through improved tax enforcement. Mbadi told viewers that the goal of this year’s finance bill is to strengthen the tax system, not increase the burden on citizens.
He confirmed that both the finance bill and a budget proposal totalling about 4 trillion shillings have been sent to parliament for approval. The proposal includes a budget deficit of 4.5 per cent of GDP.
However, one part of the bill is already causing controversy. It includes a clause that would allow the Kenya Revenue Authority (KRA) to access private financial information held by businesses and individuals. Critics argue that this measure would violate privacy and could be misused. But the minister defended the plan, saying it is necessary to stop tax evasion, especially by wealthy individuals.
Mbadi said, “There are so many people out there operating big bank accounts and they cannot pay tax simply because they are protected by these kind of mischievous laws.”
He argued that tax authorities must have the tools to find out if people are avoiding tax through hidden assets or unreported income. He insisted that the aim is not to harass law-abiding citizens but to make the system fair for everyone.
The Kenyan shilling is currently trading at around 128.90 to the U.S. dollar. With the government under pressure to meet spending needs without worsening the burden on citizens, the focus has now shifted to the effectiveness of its tax reforms and the ability to keep peace while implementing them.
