CS Mbadi Outlines Key Condition for Lowering Taxes for Kenyans

Treasury Cabinet Secretary John Mbadi has said that the government is committed to reducing taxes for ordinary Kenyans, but only after it succeeds in widening the number of people who pay taxes. 

Speaking during a televised interview, the CS outlined the government’s long-term strategy and why it believes expanding the tax base is the only realistic path to easing the burden on individual taxpayers.

According to Mbadi, the government’s priority is to bring more people and businesses into the tax system. 

He noted that once enough new taxpayers are added, the government will have more flexibility to reduce the tax rate for those who already make regular contributions. 

He explained that Kenya’s current challenge is not just high taxes, but a narrow tax base that forces the same group of people to shoulder a heavy load year after year.

The CS highlighted that some steps have already been taken, including the Tax Adjustment Law passed in December 2024. 

This law was designed to make the tax system more manageable by adjusting certain rates to reduce pressure on households that were struggling after the tax changes introduced in 2023. 

Mbadi said the adjustments were part of a wider reform programme aimed at creating a fair and predictable tax structure that will support long-term economic growth.

During the interview, Mbadi acknowledged that many Kenyans – especially those in the middle-income bracket – have been feeling financially squeezed. 

He noted that the government is aware of the frustrations caused by frequent changes in fuel levies, food taxes, and other essential charges that directly affect the cost of living. 

The CS explained that while the earlier tax measures were necessary to stabilise revenue, the government recognised the need to soften their impact over time.

Mbadi also addressed concerns over Kenya’s rising public debt, which now stands at around Ksh12 trillion. He explained that a significant portion of every shilling collected in taxes is used to repay loans. 

According to him, this situation limits the government’s ability to fund development projects and public services, making tax expansion unavoidable. 

He argued that unless the tax base grows, the burden will remain heavy for the same group of employed Kenyans.

The CS stressed that the government’s reforms are not meant to punish citizens, but to ensure the country can meet its financial obligations without sinking deeper into debt. 

He added that a stronger and broader tax system would help the government reduce borrowing, fund critical infrastructure, and eventually provide room for meaningful tax cuts.

To support the expansion of the tax base, the government has been implementing several measures aimed at improving compliance. 

These include better digital monitoring, simplified procedures for small businesses, and an ongoing effort to formalise parts of the informal sector. 

Mbadi said that once these reforms take root, Kenya will have a healthier tax system that does not rely too heavily on salaried workers.

While many Kenyans remain sceptical about the promise of lower taxes, Mbadi urged patience, saying the government is committed to creating a predictable environment where everyone contributes fairly. 

He stated that lowering tax rates prematurely would only increase the financial strain on the country, especially given the high cost of debt repayment.