A potential wave of new taxes looms as the government looks towards the Finance Bill, 2025, with National Assembly Finance Committee Chair Kimani Kuria suggesting that they may be necessary to fund the Sh4.26 trillion budget for the 2025/26 fiscal year.
In an interview on a local TV station, the Molo Member of Parliament suggested that the government might be compelled to introduce additional tax measures to support the Sh4.26 trillion budget.
Kuria’s remarks stand in stark contrast to earlier assurances from National Treasury Cabinet Secretary, John Mbadi, who recently stated that the government had no intentions of imposing new taxes.
According to Kuria, the upcoming budget will rely on three key sources: tax measures, appropriations-in-aid, and donor funding.
However, he noted that the true picture would only emerge after evaluating the revenue collected, particularly from the final quarter of the current financial year.
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“The question becomes, is that sufficient to finance the budget? If that is not sufficient, there will be additional tax measures to raise revenue to fund the budget,” Kuria explained.
He also added, “But if there is evidence to show that the existing tax measures, the appropriations-in-aid, and the donor commitments are sufficient to finance the budget ceilings, then there will be no need for a Finance Bill.”
This new wave of potential taxation is being debated passionately across the country. In particular, the size of the 2025/26 budget is likely to determine the need for a Finance Bill.
Kuria acknowledged the current revenue shortfall and the ambitious budget targets outlined in the Budget Policy Statement (BPS), admitting that the introduction of new taxes may be unavoidable.
He explained the contrasting sentiments during public participation sessions.
"When the Budget Committee is conducting public participation, the discussions are usually about the need for more funding for roads, health, dams, and other state departments," Kuria stated.
"On the other hand, when the Finance Committee holds public participation on the Finance Bill, it’s all about opposing any additional taxes. The contrast between the two is like heaven and hell.”
The debate has gained further traction following the widespread protests sparked by heavy taxation measures in the controversial Finance Bill 2024.
These protests reached a boiling point in June 2024, culminating in demonstrators storming the streets of Nairobi and a breach of Parliament.
President William Ruto subsequently rejected several of the proposed revenue-raising measures.
Kuria, however, has been adamant that unless cuts are made to the already approved BPS, Kenyans should brace for additional taxes, including a proposed Sh49.48 billion allocation to Parliament.
The prospect of new taxes remains a source of uncertainty for many as the 2025/26 fiscal year approaches.
