Treasury Cabinet Secretary, John Mbadi, has addressed the growing targeting of the payslips by the government through increased taxes ahead of the Finance Bill 2025.
During his inaugural visit to Bunge La Mwananchi at the Jevanjee Gardens in Nairobi, CS Mbadi acknowledged that many employed Kenyans are currently feeling the strain of high taxation.
He emphasized that the tax burden has reached a breaking point, stressing that the government is committed to refraining from introducing new taxes in the upcoming Finance Bill.
In his address, Mbadi said that the government has already reached its limit in revenue raising from the employed.
The CS further affirmed his earlier stance that the government will not make any adjustment on the Value Added Tax (VAT), employment tax, or any other taxation avenues.
“We are not increasing VAT at all. Actually, the Finance Bill of this year may not have any tax adjustment upwards in terms of rates. We cannot overtax Kenyans anymore we have reached a limit where we are saying no more space for taxation especially on employment income. You will not see any more taxes on employment income.”
Currently, an employed Kenyan pays 1.5 percent as housing levy, 2.75 percent towards the universal health cover- Social Health Authority (SHA), Ksh2,160-Ksh50,000 for the National Social Security Fund (NSSF) and pay as you earn (PAYE) of between 30 and 35 percent.
Also Read: KRA Collects Ksh1.2 trillion in Taxes, Records 4.5% Growth
Mbadi addresses hike in NSSF deductions
CS Mbadi, at the same time, defended the Pension Funds Act which will see a rise in the amount remitted to the National Social Security Fund (NSSF).
He added that the Act which will soon be implemented shields Kenyans from being taxed on their pension funds.
“A law was passed so many years back on NSSF to increase it to a percentage of 6% of your salary. That law is that it is being implemented today but let me tell you right now you may not see the value of saving for retirement but as a personal finance advisor I would tell you that you need to save money,” he said.
Also Read: Mbadi Reveals How KRA System Was Hacked for Six Days Disrupting Tax Collection
The Treasury CS also highlighted that the Tax Procedures (Amendment) Act 2024 brought a significant relief by raising tax-exempt benefits and providing tax-deductible contributions, which in turn reduce taxable income.
Public participation
On effective public participation on the Finance Bill, Mbadi said his engagement which started on Monday is a representation of what to expect during the public participation for the Finance Bill.
The former Suba Member of Parliament (MP) promised that public participation will not be for the elites only at the Kenyatta International Convention Centre (KICC) and other set venues, saying they will hold informal engagements where Kenyans in formal and informal employment can participate.
“In the coming budget, we will try as much as possible to engage every Kenyan in a more informal manner like we have started today. This is to ensure we do not stick to the elites only at KICC where they are the only ones who come to give their views,” he added.
The Finance Bill 2024 collapsed after Kenyans, mainly made up of Gen Zs, revolted and stormed Parliament to protest the passing of perceived punitive taxes despite demands that they be dropped.
President William Ruto declined to assent to it and instead ordered austerity measures across government.
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