The National Treasury has ruled out introducing new tax rates in the upcoming 2026 Finance Bill, instead shifting focus toward improving revenue collection efficiency.
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 is not planning to increase tax rates.
He emphasized that the priority will be expanding the tax base and strengthening collection systems rather than raising taxes on citizens.
“We are not looking at a possibility of increasing tax rates because there is no difference between 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,” Mbadi said.
Focus Shifts to Digital Tax Collection
The Treasury CS noted that one of the key challenges facing the Kenya Revenue Authority (KRA) is the slow transition of taxpayers to digital platforms.
He said the government is pushing for faster automation in tax collection systems to improve efficiency and boost compliance.
According to Mbadi, many processes within the tax system remain manual, slowing down revenue collection efforts.
“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 fast-moving automation of revenue collection,” he added.
The reforms are expected to align with broader efforts to modernize tax administration and improve service delivery.
Context on Tax Policy Direction
The announcement comes a month after President William Ruto revealed plans to reduce the tax burden for low-income earners.
President Ruto had stated that Kenyans earning KSh30,000 and below would be exempted from income tax once the proposal is approved by Parliament.
He also indicated plans to reduce taxes for those earning up to KSh50,000 from 30 percent to 25 percent, as part of a broader tax relief strategy.
Conclusion
The Treasury’s position signals a shift toward improving efficiency in revenue collection rather than increasing tax rates, even as the government continues to explore broader tax reforms aimed at easing pressure on households while sustaining national revenue.
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