Treasury Cabinet Secretary John Mbadi indicated that the government plans to reduce Value Added Tax (VAT) and other taxes. He said the National Treasury aims to lower VAT from 16% to 14% as part of its medium-term budget, along with a reduction in corporate tax and additional taxes.
During the launch of the FY 2025/26 Budget Preparation Process on Monday, CS Mbadi stated that the government will not endorse any additional expenditures. He emphasized the need to enhance efficiency, accountability, and the prudent use of resources.
Mbadi also mentioned the government’s plans to implement a new financial management system that prioritizes transparency in the procurement process.
He stated, “Agriculture will receive priority to support manufacturing and economic growth, focusing on small and medium-sized enterprises (SMEs) and housing. Despite operating under fiscal constraints, the government will strive to ensure growth and expand opportunities.”
Mbadi mentioned that the government’s fourth medium-term plan will transform the Agricultural Sector, the Micro, Small, and Medium Enterprise (MSME) economy, housing and settlement, healthcare, and the digital superhighway. He confirmed that the implementation of the FY 2024/25 Budget has begun in earnest.
“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 explained.
Meanwhile, Treasury PS Chris Kiptoo stressed the importance of adhering to the Budget Review and Outlook Paper (BROP), sector budgets, and revenue bills, including the review of county allocations.
He highlighted the need for a zero-based budgeting approach and proper budget costing tools. Kiptoo also announced that budget review meetings would occur to ensure compliance.
