Kenyan Businesses Handed Major Boost as Treasury Chief Signals Sharp Tax Cuts
Kenyans who own or run businesses could soon receive significant tax relief after Treasury Cabinet Secretary John Mbadi signalled a major policy shift aimed at easing the tax burden on enterprises across the country.
Speaking on Saturday, January 17, during the Privatisation and Budget People’s Dialogue forum in Kakamega, Mbadi acknowledged that the government’s long-standing approach to taxing businesses had failed to deliver meaningful economic growth or job creation.
According to the Treasury CS, heavy taxation has constrained businesses, limiting their ability to expand, invest and employ more workers — a trend he warned was directly contributing to economic stagnation.
“Taxing businesses affects the creation of employment,” Mbadi told the gathering. “The best thing is to reduce to the bare minimum the taxation of business, and that is what we are pushing towards.”
Government Rethinks Business Tax Strategy
Mbadi explained that the government now views business growth as central to job creation and long-term economic stability, adding that enterprises should be protected rather than burdened.
He noted that excessive taxation shrinks profit margins, discourages investment and forces employers to freeze hiring or lay off workers — outcomes that ultimately hurt the wider economy.
As a result, the Treasury is now prioritising policies that allow businesses to retain more capital, reinvest and create employment, particularly at a time when many Kenyans are grappling with high living costs.
“When businesses cannot grow, the economy cannot grow,” Mbadi said, underlining the need for a more sustainable taxation model.
‘Tax the Rich First’ — Mbadi Issues Clear Warning
While pushing for tax cuts for businesses, the CS stressed that taxation must still be applied cautiously and fairly. He argued that the burden of taxation should fall first on wealthy individuals rather than enterprises that drive employment.
“Taxes are not the best thing,” Mbadi admitted. “When you are taxing, you must be very careful — tax the rich, do not go for business, then come to income if the money you get is not enough.”
His remarks are likely to resonate with small and medium-sized enterprises (SMEs), which have repeatedly complained that rising taxes and compliance costs have made it difficult to stay afloat.
Treasury Rules Out New Taxes in Next Budget
In a move likely to reassure taxpayers, Mbadi firmly dismissed speculation that the government plans to introduce new taxes or raise existing ones in the 2026/2027 budget cycle.
He said the administration had learnt painful lessons from the 2024 anti-Finance Bill protests, which saw widespread demonstrations, destruction of property and eventually forced the government to withdraw the controversial proposals.
“The government tried to push further, more taxes, and we know the outcome,” Mbadi said. “That is not an option. No more taxes or increased taxation for Kenyans.”
‘Forcing More Taxes Would Be Dangerous’
Mbadi warned that ignoring public opposition to additional taxation would not only be unfair but could also destabilise the economy.
He emphasised that Kenyans had made their position clear and that imposing new levies would further erode private wealth at a time when households and businesses are already under pressure.
“By the way, we will be unfair if we push for more taxes,” he said. “This is because taxes reduce private wealth. Taxes will reduce your wealth whether you like it or not, although we have to pay them.”
Relief for Businesses?
Mbadi’s remarks mark one of the strongest indications yet that the Treasury is preparing a softer tax regime for businesses, potentially offering relief to employers who have struggled under successive tax increases in recent years.
If implemented, the proposed shift could boost investor confidence, protect existing jobs and help stimulate economic recovery — though Kenyans will be watching closely to see whether the promises translate into concrete policy changes in the next budget.
Kenyan Businesses Handed Major Boost as Treasury Chief Signals Sharp Tax Cuts