The National Treasury has ruled out introducing new tax rates in the 2026 Finance Bill.
Speaking on Thursday, March 26, while appearing before the National Assembly’s Committee on Budget and Appropriation, Treasury Cabinet Secretary John Mbadi said the government will focus on improving revenue collection efficiency.
He noted that although the tax base is yet to expand significantly, the Treasury will push the Kenya Revenue Authority (KRA) to adopt fast-moving automation systems in tax collection.
“I want to state that we are not looking at a possibility of increasing tax rates because there is no difference of this year and last year; Kenyans are the same, and the rates are still the same. We are looking at the possibility of expanding the base,” said CS Mbadi.
The Treasury CS pointed out that one of the biggest challenges KRA is facing is that taxpayers have not moved to digital platforms, and the authority still relies on largely manual tax collection systems.
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“I know this has been talked about a lot, and the base is not expanding as expected, but we are putting pressure on KRA, and some changes must be seen in terms of revenue collection.
“Failure to which we must make reforms to adapt to the first moving automation of revenue collection,” Mbadi stated.
Notably, this comes a month after President William Ruto announced the government's plan to scrap taxes for Kenyans earning below Ksh30,000.
Speaking on February 4 at State House, Nairobi, President Ruto said they will table the proposal in parliament to remove the taxes.
“We have begun the process of bringing down taxation. Once Parliament opens next week, we will submit proposals to Parliament that every Kenyan whose salary is Ksh30,000 or below will no longer pay taxes,” said President Ruto.
The Head of State also said his administration plans to reduce taxes for Kenyans earning up to Ksh50,000 by 5 percent.
“For any Kenyan earning up to Ksh50,000, we are reducing their taxes from 30 percent to 25 percent,” he added.
