Kenyans to pay more for government services as the state plans to channel in more funds from services offered by ministries and other institutions in efforts to fund the 2025/26 national budget.
According to the National Treasury CS John Mbadi, through the Budget Policy Statement, is one of the ways they are going to raise an additional KSh387 billion in ordinary revenue, for an increase from KSh2.6 trillion to KSh3.01 trillion.
The key government services likely to be affected are the issuance of national identity cards, passports, driving licences, Marriage and Birth Certificates, as well as Certificate of Good Conduct and business licences.
The diverse services that Kenyans get from the government range from basic healthcare services to tax-filing.
This comes even as Kenyans continue to grapple with the high cost of living as a result of the high tax regime.
Some 22,000 public services have been digitised and are now available online under eCitizen, while the ICT ministry is planning to onboard the remaining 2,412 services to enhance efficiency, transparency, and accessibility for Kenyans.
Already, over 13.5 million users have registered on the eCitizen platform, with the government saying the move to fully digitise government operations was on course and is aimed at improving service delivery and citizen engagement.
As indicated in the 2024/25 Supplementary Budget, the State targets to raise KSh3.5 trillion for the budget for the financial year.
This was after forcing through some controversial tax proposals, such as levies on essential commodities like bread and diapers, which ignited protests that led to President William Ruto’s decision to take back the Bill and implement severe austerity measures.
The new Finance Bill aims to address Kenya’s fiscal deficit in a way that will not rattle the collective ire that characterised the 2024/2025 one.
The 2025/26 budget has been revised to cap the fiscal deficit at 4.5% of GDP, down from 5.1% in the previous year.
This move is part of broader austerity measures designed to enhance fiscal discipline and reallocate resources to essential public services.
“The Bill seeks to minimise tax-raising measures. Instead, it aims to enhance tax administration efficiency through a new legislative framework,” the dispatch reads in part.
Key provisions that the government targets include streamlining tax refund processes, sealing legal gaps that delay revenue collection, and reducing tax disputes by amending the Income Tax Act, VAT Act, Excise Duty Act and the Tax Procedures Act.
This, however, means that businesses will not be enjoying the many benefits, such as the tax incentives that helped enhance liquidity, according to the Budget Policy Statement.
The Bill also proposes critical changes to support small businesses, allowing them to fully deduct the cost of everyday tools and equipment in the year of purchase, thereby eliminating unnecessary delays in accessing tax relief.
The new Finance Bill, which considers raising funds to service a Sh4.3 trillion budget, is, however, in the spotlight in the aftermath of the tumultuous 2024/25 fiscal year, which was marked by widespread public dissent and economic instability.
While it seeks to harness revenue consolidation efforts, the Bill presents potential adverse notable effects from the high cost of living, business operations and personal privacy, leading to widespread concerns, creating the need for proper public participation.
The BPS will now be tabled to Parliament by the National Treasury.It acts as a roadmap to both the National and the county governments in preparing their budgets for the following financial year and in the medium term.
The approved document is then submitted to the National Treasury, the drafter of the budget, which then makes the necessary adjustments then tables it before the Cabinet for approval.
The next step that it will undergo will be tabling before Parliament, where it will undergo the first reading, marking its first introduction and reading.
After this, the Bill will then be published, and the public will be invited to air their views. During the process, key concerns ought to be recorded.
The Bill will then be debated in Parliament during the committee stage, with the recognition of the various changes highlighted by the committee as a result of the public engagement.
Right after this comes the second reading, where the legislators further debate the bill with the full committee of the House. In the event that the Bill has been passed, it is then passed to the president for Assent.
Last year, the country’s economic activities nearly came to a halt following the deadly Gen Z protests that were driven by the high tax proposals, which targeted even the basic household commodities such as bread and diapers.
The government was also seeking to tax the creative economy. Content creators, despite the challenging venture being one of the depended-on avenues by the youthful population, among others.
The proposals were widely seen as oppressive, especially by a youthful population already grappling with joblessness and rising living costs.
In response to the protests, President William Ruto recalled the Bill and ordered immediate austerity measures.
His directive marked a significant shift in tone and strategy, one that may shape how this year’s Finance Bill is received both politically and publicly.
