Former Cabinet Secretary for Water, Sanitation and Irrigation, Sicily Kariuki, has warned Kenyans to brace themselves for tough times ahead over the new tax measures that have been proposed in the Finance Bill, 2025, that is before the National Assembly.
Speaking on the night of Wednesday, June 11, 2025, during an interview with one of the local TV stations, Kariuki said that whereas there is not any direct tax being increased due to what was witnessed in June 2024 when the Gen Zs rejected the finance bill, there are a lot of negative implications in the measures being passed.
This, she warned, will make the lives of most Kenyans tougher.
Corporate incentive removal
According to Kariuki, the removal of the corporate incentive will hit hard the manufacturing sector, leading to loss of jobs.
The move, Kariuki says, will also make it hard for the manufacturing sector to create any new jobs.
“We were having a conversation as we waited to come in, in terms of what the budget that is going to be read tomorrow means for us. Congratulations, CS, there isn’t any direct tax that we are seeing being increased because we are now sensitive to what happened last year.
“But can I shock you, shock of shocks? And I have also taken time to look at the documents; there are a lot of negative implications from the measures being passed. I can single out one: the corporate incentive – this is for the manufacturing unit – has been removed, and the implication of tampering with the manufacturing sector at this point and pulling out any incentives that were there before means that we really don’t care in terms of generating employment in this country. Even if we were to create 10 jobs, we are not going to because we are making our investment environment uncompetitive,” Kariuki said.
Duties on packaging
She went ahead to argue that the introduction of duties on packaging materials will also carry negative implications.
“We have duties being introduced on packaging materials. Everything that we touch, excise duty – there is an implication that that again is going to push the consumer, the retailer, and the commodity, or good, by a similar margin,” she said.
Budget reading
Treasury Cabinet Secretary John Mbadi is on Thursday, June 12, 2025, set to read his first budget as a CS.
The National Treasury is set to spend over Ksh4.2 trillion in the 2025/26 financial year, an amount that the Treasury aims to finance through debt, ordinary revenue, grants, fees charged for government services, and borrowing, both domestic and external.
To finance the budget, CS Mbadi is expected to pronounce the revenue-raising measures, with a target of tax collection now set at Ksh2.7 trillion, equivalent to 64 per cent of the funding required.
Treasury hopes to collect Ksh560 billion in government levies and fees in the form of Appropriations-in-Aid. That pushes the total revenue to Ksh3.3 trillion, leaving a budget gap of nearly Ksh900 billion.
With grants of Ksh46.9 billion expected, the National Treasury faces a budget deficit of about Ksh876 billion to be financed through borrowing.
