Treasury CS John Mbadi. Photo: Courtesy
National Treasury Cabinet Secretary John Mbadi has ruled out fresh borrowing and further tax hikes, signalling a shift in Kenya’s fiscal strategy as the government looks for alternative ways to raise revenue.
Speaking on Tuesday during the launch of the Kenya Economic Report 2025, Mbadi said the country has reached its borrowing limit and cannot continue relying on loans to fund public spending.
He added that increasing taxes is also no longer an option, citing the pressure already facing workers and households.
“We cannot take more loans; that is the reality. We also cannot tax you more,” Mbadi said. “In fact, we should reduce taxes. That is what the government is thinking about.”
The Treasury CS disclosed that the government is preparing to lower taxes, with Pay As You Earn (PAYE) expected to be among the first areas targeted for relief.
He said Kenyans should expect announcements confirming reductions in income taxes for salaried workers.
Mbadi noted that the focus will now shift to innovative revenue-raising measures that do not burden citizens further.
While he did not provide specific details, he stressed that the approach must support economic growth while maintaining fiscal stability.
The remarks come amid rising public concern over the cost of living, high taxation, and Kenya’s growing debt burden.
Mbadi said the government’s priority is to balance revenue needs with economic recovery and protection of workers’ incomes.