National Treasury Cabinet Secretary John Mbadi proposes reducing the value-added tax from 16 percent to 14 percent to improve tax administration, enhance compliance, and expand the tax base.
Speaking during the unveiling of the 2025/26 Budget Preparation Process in Nairobi, Mbadi also proposes reducing corporate tax from 30 percent to 25 percent and implementing pay-as-you-earn.
“I will surprise you; in the medium term, we want to reduce tax rates. We are not looking at increasing taxes,” said CS Mbadi.
The Kenya Revenue Authority collected Kes 313.37 billion in domestic VAT and Kes 488 billion in corporation taxes in the June 30, 2024 financial year.
The proposed tax cuts come after the suspension of the 2024 Finance Bill, which aimed to introduce Kes 346 billion in new taxes but faced backlash and anti-government protests.
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