No New Taxes, Just New Priorities: The 2025/26 Budget in Focus

For a country that has long debated taxation in hushed tones and treated national budgets as the preserve of economists and technocrats, the 2025/26 Finance Bill marks a radical shift in tone, ownership and ambition.

What was once seen as a dry legislative ritual has become a national conversation – passionate, messy, democratic, and long overdue.

What does this Budget actually say?

No New Personal Income Taxes – Only Smart Adjustments

Forget the doomsday headlines. The 2025 Finance Bill does not introduce new taxes on your salary or personal income.

Instead, it proposes strategic tax reforms that widen the tax base, seal evasion loopholes, and provide more incentives for compliance.

Because here’s the truth: Taxation is not punishment – it’s a tool for nation-building.

From education to healthcare, from roads to reliable electricity, every coin collected is an investment in a Kenya that works for all.

Under the Bottom-Up Economic Transformation Agenda (BETA), this Government is intentionally directing tax revenue toward projects that impact lives at the grassroots.

A grocery in downtown Nairobi (Image: Files)

Raising Domestic Revenue

It’s a simple equation: if we are serious about reducing debt, we must increase what we collect internally. Kenya cannot continue borrowing to build classrooms, pay doctors, or repair roads.

Through the BETA lens, taxation isn’t just about plugging budget deficits – it’s about empowering communities, growing MSMEs, supporting the vulnerable, and funding transformative programs like Affordable Housing and Universal Healthcare.

Budget Saboteurs Are Hoping You Don’t Understand the Numbers

A few loud voices have tried to delegitimize the entire budget process – ironically, many of them fully understand how it works.

They know that governments all over the world use budgets to implement policy and fund promises. But rather than educate the public, they prefer to stir mistrust and anger.

This administration was elected to deliver on a clear vision, anchored in BETA. Undermining the process is not just unfair – it weakens democratic tradition and distracts from the work at hand.

Major Sector Wins On the Ground

So what does this year’s budget deliver

Infrastructure & Transport Ksh 318B for road construction, rural electrification, digital connectivity Better roads, faster transport, electricity in rural homes, more access to digital jobs.

Education Ksh 700B – the highest sector allocation More students enrolled through free basic education, more support for TVETs and universities.

Healthcare (especially Cancer Care) Massive investment in radiotherapy machines, regional hospitals, and UHC rollout Faster diagnosis, affordable cancer treatment, and a working “Taifa Care” system.

MSME Support Enhanced incentives and access to funds for traders and small business owners Stronger local economies, youth employment, financial independence at the grassroots

These aren’t theories.

Homes are being built and allocated. Hospital services are improving. Wi-Fi is being rolled out to markets and rural spaces.

We’re Not Just Funding Government – We’re Funding Ourselves

The Finance Bill 2025 is more than a policy framework. It is a pact – between the citizen and the state – to prioritize Kenya’s future.

It’s about creating a functional, inclusive economy that works for the majority, not just the few.

So the next time you hear the word “budget,” don’t switch off. Engage. Understand. Question.

And yes – own it.

Because this time, it really is yours.

No New Taxes for Kenyans in the Finance Bill 2025

In the wake of last year’s tax-related unrest, the Kenyan government has introduced the Finance Bill 2025, signaling a strategic pivot from introducing new taxes to enhancing tax administration and closing existing loopholes.

This move aims to bolster revenue collection without imposing additional financial burdens on citizens.

Cabinet Secretary for Finance John Mbadi explains the Finance Bill 2025 in a recent media interview. (Image: Files)

Key Highlights Are: 

1. No New Taxes Introduced

Learning from the 2024 protests the government has refrained from proposing new taxes in the 2025/26 budget.

Instead, the focus is on improving tax collection efficiency and sealing revenue leakages.

2. Fiscal Deficit Targeted at 4.5% of GDP

The budget outlines a total expenditure of approximately KSh 4 trillion, with a planned fiscal deficit of 4.5% of GDP.

This is a reduction from the previous year’s 5.1%, reflecting efforts to enhance fiscal discipline and reduce public debt vulnerabilities.

3. Enhanced Tax Administration Measures

Access to Financial Data: The Kenya Revenue Authority (KRA) may be granted access to individuals’ and businesses’ financial data to combat tax evasion, a proposal that has raised privacy concerns.

Digital Asset Tax Reduction: The tax rate on digital assets is proposed to be reduced from 3% to 1.5%, aiming to encourage compliance among digital asset holders.

VAT Refund Period Shortened: The waiting period for VAT refunds on bad debts is proposed to be reduced from three years to two, improving cash flow for businesses.

4. Adjustments in Tax Procedures

Tax Loss Carryforward Limitation: Taxpayers may be restricted to carrying forward tax losses for a maximum of five years, impacting long-term financial planning for businesses.

Mandatory Electronic Tax Invoicing: All registered persons making supplies, including exempt supplies, will be required to issue electronic tax invoices, enhancing transparency and compliance.

5. Reclassification of Goods and Services

Certain goods and services are proposed to be reclassified between taxable, exempt, and zero-rated categories, affecting VAT obligations for businesses dealing with these items.

A sample image of a fifty shilling note in Kenya (Image: Google)

Public Engagement

The Finance Bill 2025 is currently under parliamentary review, with public participation forums expected to be announced.

Stakeholders are encouraged to engage in these discussions to provide feedback and influence the final provisions of the bill.

In a Nutshell ….. 

The Finance Bill 2025 represents a deliberate shift towards strengthening tax administration and enhancing fiscal responsibility without introducing new taxes.

By focusing on efficiency and closing loopholes, the government aims to increase revenue collection while maintaining public trust and economic stability.

For a more detailed discussion on the Finance Bill 2025, you can watch the following video:

Kenyan Youth: The Hits and Misses in the 2025/26 Financial Budget

The 2025/26 financial budget is now public. But let’s be honest – not everyone is lining up to read a 300-page document full of jargon.

So, I’ve attempted to break it down to the bits that have boosted the Kenyan youth – and, the parts that have them in a choke hold.

Students at an unidentified college in Nairobi during a social moment (Image: Files)

1. A New, Better Youth Fund 

The government is planning to scrap the old Youth Enterprise Development Fund and replace it with a better version – one that will offer loans, grants, and business training for youth.

So, if you’ve got an idea, you might just get funded… if this fund goes live soon.

2. NYS to Recruit 40,000 Youth

If you’re looking for skills, discipline, or even a structured income opportunity, the National Youth Service (NYS) is targeting 40,000 new recruits this year.

That means vocational training and possible deployment in various government projects.

3. Education is Feeling the Pinch

Over 900,000 students in secondary school are at risk as funding for free education faces a Sh43 billion hole.

The school feeding program too? Underfunded. So, while education remains a priority, the struggle is real.

4. Digital Hubs

Despite the cuts, 274 digital hubs are already up and running. Over 500,000 youth have received training, and some are already earning online.

The internet might not solve everything – but it can still help pay some bills.

5. NYOTA & WHOZNEXT: New Opportunities

These new programs want to connect youth with jobs, mentorship, and talent growth.

Think of them as modern ways to showcase what you can do – whether it’s coding, content creation, or your side hustle. Eyes open on these.

6. Cheaper Smart Phones Locally Assembled

You don’t need to break the bank for a smartphone anymore.

Locally assembled, smart-enabled phones will now retail at Sh7,500. That means more youth can access the internet, digital work, and apps that actually pay.

7. Focus on the Creative Economy

The government says it wants to promote the arts, music, fashion, and everything creative — but again, funding is a bit tight. Programs like “Vijana Vuka na Afya” are struggling to stay afloat. But the intention is there, and that’s still worth watching.

8. Digital Jobs Programs Face Budget Cuts (Yes, Really)

The Ajira Digital and Jitume Hub programs – the ones meant to help you earn online – have been hit by serious funding cuts.

That means fewer training slots and fewer digital job opportunities. If you were planning to hop onto online work via government-supported platforms, this might slow you down.

So, In a Nutshell ….

The 2025/26 budget is trying to balance a tough economy with big dreams – especially for the youth.

Yes, there are challenges (cuts here, shortfalls there), but the doors aren’t shut.

Whether it’s hustling online, joining NYS, or pitching that business idea, there’s still room to play your part.

Stay woke. Stay ready. Your next opportunity might just be one budget item away.

Resetting the Economy: Kenya’s Budget Reboot for 2025/26

Kenya is pressing the reset button – not with more taxes or tougher times, but with a bold, people-first approach to budgeting.

The 2025/26 budget is shaping up as a moment of reckoning and renewal.

It’s not just about numbers – it’s about national priorities, fiscal discipline, and citizen welfare.

Finance CS John Mbadi during a past press conference. (Images: File)

Listening Over Legislating

Following the public outcry and eventual withdrawal of the Finance Bill 2024, the message from Kenyans was loud and clear: development must not come at the cost of daily survival.

The new direction? A government that listens.

Cabinet Secretary John Mbadi is leading a shift toward responsibility, affordability, and innovation – not pressure.

No major new taxes. No knee-jerk deductions. Just a smarter way of doing things.

What to Expect:

Tax Relief, Not Pressure: Households can breathe a little easier. The 2025/26 budget avoids introducing new taxes, easing pressure on incomes and consumption.

Efficiency is the New Currency: The plan is to operate within a zero-deficit budget – tightening belts in government, trimming fat, and restoring public confidence.

Innovation Over Imposition: Forget toll hikes and punitive tax measures. Instead, the Treasury is betting on tech to raise revenue the smart way.

Innovation at Work:

Smart Traffic Monitoring: Automated enforcement of road rules like overloading and speeding will enhance safety and bring in revenue without burdening compliant drivers.

Digital Governance: Expect deeper automation and tighter oversight. E-governance will plug revenue leaks and speed up service delivery.

An image of the previously decommissioned Kenyan currency (Image: Files)

Public Participation as Policy

For the first time in recent memory, public hearings and stakeholder consultations are central to the budget process.

This isn’t just budgeting – it’s co-creating Kenya’s future.

What is Ahead? 

This is more than a budget.

It’s a chance to rebuild trust, refocus national energy, and fuel economic growth without pain.

With BETA as the guiding framework and prudence at its heart, Kenya’s 2025/26 financial year may just become the blueprint for resilient, inclusive recovery.

Because the future isn’t far – and this budget might just be the bridge that gets us there.