The government plans to reduce Value-added Tax (VAT) and other taxes bringing a slight relief to Kenyans in the harsh economic conditions.
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 FY2025/26 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.
The CS noted 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 and broaden opportunities,” stated Mbadi.
The government 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.
CS Mbadi also commented on the FY 2024/25 Budget, saying its implementation has commenced.
“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 stated.
Treasury PS Chris Kiptoo also 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 noted the need for a zero-based budgeting approach, using proper budget costing tools, and announced that budget review meeting would be held to ensure adherence.
