Kenya Unveils 2025/26 Budget with No New Taxes Amid Public Pressure

Government Shifts Focus to Spending Cuts and Economic Stimulus

NAIROBI, Kenya – May 16, 2025 – The Kenyan government has proposed a 2025/26 national budget that introduces no new taxes, marking a sharp policy shift from last year’s controversial tax hikes that sparked widespread protests and civil unrest.

The budget proposal, presented by Finance Minister John Mbadi, outlines a spending reduction strategy and a renewed focus on economic stimulus to cushion citizens from persistent inflation and high living costs.

Response to Public Outcry After 2024 Tax Protests

The decision to avoid new levies follows last year’s implementation of a raft of new taxes under President William Ruto’s administration, which triggered weeks of nationwide demonstrations. The unrest, led by civil society groups and youth movements, resulted in the deaths of more than 50 people, prompting international concern and domestic political backlash.

“This year’s budget is crafted with the realities of our economy and the voices of our citizens in mind,” said Mbadi. “We must stabilize the economy without overburdening the people.”

Key Measures: Fuel Levy Reduction and Targeted Stimulus

Among the headline measures in the proposed budget is a reduction in fuel levies, aimed at lowering transportation and production costs to tame inflation. The budget also prioritizes funding for agriculture, MSMEs (micro, small, and medium enterprises), infrastructure, and job creation, particularly for the youth.

The government aims to balance fiscal responsibility with inclusive growth, addressing mounting public dissatisfaction while meeting budget deficit targets agreed with the International Monetary Fund (IMF).

IMF, Investors Watching Closely

The budget will now go before Parliament for debate. With international lenders and investors closely watching Kenya’s fiscal discipline, the proposal is seen as an attempt to stabilize debt while maintaining social cohesion after last year’s unrest rattled market confidence.

Public Reaction Mixed But Cautiously Optimistic

Initial reactions to the budget announcement have been cautiously optimistic, with economic analysts praising the restraint on tax expansion, but warning that cutting spending must not come at the cost of essential public services.

“It’s a delicate balancing act. The government must show how spending cuts will affect delivery in education, health, and security,” said economist Faith Naliaka.