Treasury Cabinet Secretary John Mbadi has confirmed that the upcoming Finance Bill 2025 will not include any increases in Value Added Tax (VAT) or employment-related taxes.
Addressing members of the Bunge la Wananchi caucus in Nairobi on February 3, 2025, Mbadi stated that the government was prioritizing the protection of Kenyans from the heavy burden of overtaxation.
"We've reached the limit in terms of taxing employment income," Mbadi remarked, emphasizing that no further tax hikes would be proposed under his leadership.
This announcement comes as a relief to many Kenyans already feeling the strain of existing tax policies.
However, the government has already implemented deductions such as the Social Health Insurance Fund and the Affordable Housing Levy, which continue to impact workers' salaries.
The Affordable Housing Levy, for instance, stands at 1.5% of an employee's gross salary, with employers matching this contribution.
Mbadi also defended his push for an amendment to the Pensions Fund Act, which would exempt pension funds from taxation.
This measure aims to encourage saving and protect retirees from excessive deductions, ensuring a more secure financial future for senior citizens.
"This is to protect my own pension and that of other Kenyans when we retire," Mbadi concluded.