Gov’t plans to lower VAT, other taxes - Mbadi

Gov’t plans to lower VAT, other taxes - Mbadi

Kenyans could get a slight relief from the biting economic conditions in the country as the government to reduce Value-added Tax (VAT) and other taxes. 

The National Treasury, in its medium term budget intends to reduce VAT from 16% to 14%, along with reduction of corporate tax and other taxes. 

During the launch of the FY 2025/26 Budget Preparation Process on Monday, Treasury Cabinet Secretary John Mbadi said the government will not support any additional expenditures, but instead focus on enhancing efficiency, accountability, and prudent use of resources. 

Mbadi added that there are plans to implement a new financial management system with an emphasis on transparency in the procurement process.

“Agriculture will be prioritized to support manufacturing and economic growth, with a focus on SMEs and housing. Despite operating under fiscal constraints, the government will work to ensure growth and broaden opportunities,” Mbadi said. 

According to the Treasury CS, the gov’t in its fourth medium term plan, will focus on transforming the Agricultural Sector, (ii) Micro, Small and Medium Enterprise (MSME) Economy, Housing and Settlement, Healthcare and the Digital Superhighway. 

Mbadi also commented on the FY 2024/25 Budget, saying its implementation has commenced in earnest.

“However, it is important to note that following the withdrawal of the 2024 Finance Bill, the Government has had to forego additional revenue measures. We therefore implemented measures aimed at aligning our priorities with the available resources,” he said. 

At the same time, Treasury PS Chris Kiptoo emphasized on the importance of following the Budget Review and Outlook Paper (BROP), sector budgets, and revenue bills, including the review of county allocations. 

He highlighted the need for a zero-based budgeting approach, using proper budget costing tools, and announced that budget review meetings would be held to ensure adherence.


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