Kenya Targets Reduced Fiscal Deficit of 4.5% GDP for 2025/26
The Kenyan government has announced plans to reduce the fiscal deficit to 4.5% of GDP in the 2025/26 fiscal year. This move towards fiscal consolidation is coupled with a pledge to avoid introducing new taxes, focusing instead on closing loopholes and improving tax compliance, following last year's public protests.
The Kenyan government has formally announced ambitious plans to significantly shrink the fiscal deficit to 4.5% of the Gross Domestic Product (GDP) in the upcoming 2025/26 fiscal year. This proactive move towards fiscal consolidation underscores the administration's commitment to prudent financial management and long-term debt sustainability. The decision comes amid a significant public pledge by the government to avoid the introduction of new taxes, a direct response to the widespread protests and public discontent experienced in the previous year over tax hikes. This strategy aims to balance the need for revenue generation with the economic welfare of its citizens, focusing instead on efficiency and compliance within the existing tax framework by closing loopholes and expanding the tax base through better administration. This approach is critical for investor confidence and achieving long-term economic stability for the nation.