Kenya’s 2025/26 Budget Proposals Avoid New Taxes
May 10, 2025 — Nairobi, Kenya
The Kenyan government has unveiled its budget proposals for the 2025/26 fiscal year, drawing attention for its decision to avoid introducing any new taxes. This approach comes after widespread protests and riots in the previous year, sparked by the introduction of new tax measures and the rising cost of living. In a bid to ease public dissatisfaction, the government has instead focused on enhancing tax collection efficiency to raise additional revenue without burdening the citizenry with higher taxes.
Finance Cabinet Secretary Njuguna Ndung’u, in his budget presentation, outlined the government’s strategy to boost revenue through improvements in tax administration and compliance. The government plans to leverage technology and streamline operations within the Kenya Revenue Authority (KRA) to curb tax evasion and broaden the tax base.
“We understand the challenges faced by our citizens, especially in light of last year’s economic strains,” Ndung’u stated. “This budget is about enhancing efficiency and effectiveness in our existing tax systems to ensure that we are able to meet the country’s development needs without placing an additional burden on Kenyans.”
The decision to avoid new taxes marks a shift in the government’s approach, which had previously relied heavily on tax hikes to fill the budget deficit. This year, officials are focusing on improving the collection of existing taxes, targeting sectors where compliance has been historically low. The government also aims to harness digital platforms to make tax filing and payment easier for both individuals and businesses.
Additionally, the budget places emphasis on expanding public investments in key sectors, such as infrastructure, healthcare, and education, while also ensuring that social support programs are adequately funded. The proposed budget allocations are expected to stimulate economic recovery and support job creation, particularly in areas that have been hard-hit by the economic downturn.
One of the highlights of the budget is the allocation for infrastructure development, which includes investments in roads, energy, and water projects across the country. These projects are seen as key to driving economic growth, especially in rural areas, and improving access to essential services for underserved communities.
The government has also allocated significant resources to bolster healthcare and education, with a particular focus on expanding access to primary healthcare services and improving education standards, particularly in rural areas. This move is part of the government’s ongoing efforts to improve social services and ensure that the benefits of economic growth are felt by all segments of society.
Despite the absence of new taxes, the budget has faced mixed reactions. While some businesses and taxpayers have welcomed the government’s cautious approach to tax increases, others argue that the focus on better tax collection might still lead to additional pressure on businesses that are already struggling with high operational costs.
Opposition leaders have expressed concerns over the sustainability of the government’s revenue strategy, urging that a more comprehensive plan for economic reform is needed to address the country’s mounting debt and create long-term fiscal stability.
“The government’s focus on improving tax collection is a step in the right direction, but there is still a need for broader reforms to reduce the fiscal deficit and ensure the long-term health of our economy,” said Raila Odinga, leader of the opposition.
The 2025/26 budget proposals will now go to Parliament for further discussion and approval. As the budget process moves forward, it is expected that lawmakers will scrutinize the proposed allocations and suggest amendments based on the priorities of their constituencies.
The government has committed to an inclusive and transparent budgetary process, ensuring that the concerns of all stakeholders are considered. The final budget is expected to be presented in June 2025, after which it will be implemented in the following fiscal year.