Speaking on Saturday, January 17, 2026, during the Privatisation and Budget People’s Dialogue forum held in Kakamega, Mbadi said the government was rethinking its approach to taxation, particularly for the business sector, which he described as the backbone of employment and economic expansion.
According to the CS, overtaxing businesses has had unintended consequences, including slowing down investments, limiting expansion, and reducing the capacity of enterprises to absorb more workers.
“When you tax businesses excessively, you interfere with job creation,” Mbadi said.
“Businesses need room to grow, invest, and employ more people. Our focus now is to reduce business taxation to the bare minimum to protect jobs and create more employment opportunities.”
Mbadi noted that the Treasury’s priority is to create an enabling environment for entrepreneurs, small and medium-sized enterprises, and large corporations alike, stressing that economic growth cannot be achieved without a thriving private sector.
While emphasising the need for tax relief for businesses, Mbadi cautioned that taxation must still be guided by fairness and equity. He argued that the tax burden should be structured in a way that targets wealth rather than production and enterprise.
“When you are taxing, you must be very careful,” he said. “Tax the rich first. Do not go for businesses. If that is not enough, then you can come to income. Businesses are the engine of growth, and we must protect them.”
The remarks come amid growing public pressure on the government to ease the tax burden following the widespread protests against the 2024 Finance Bill, which was eventually withdrawn after intense opposition and incidents of unrest in parts of the country.
Addressing concerns about possible new levies in the next budget cycle, Mbadi dismissed claims that the government intends to introduce additional taxes or increase existing ones in the 2026/2027 financial year.
He said the government had learned important lessons from the backlash witnessed during the 2024 Finance Bill debate and would not pursue policies that place further strain on Kenyans.
“The government tried to push more taxes before, and we all saw the outcome,” Mbadi said. “That is not an option. There will be no new taxes and no increase in existing taxes for Kenyans.”
Mbadi emphasised that Kenyans have clearly expressed their rejection of additional taxation, warning that ignoring public sentiment would not only be unfair but also harmful to the economy.
“Taxes reduce private wealth, whether we like it or not,” he said. “We have to pay taxes, but we must also be honest about their impact. If we push for more taxes, we will be unfair to the people and damage the economy.”
The Treasury CS explained that the government’s revised fiscal approach is aimed at stimulating economic activity, supporting business recovery, and restoring public confidence in budget-making processes.
He added that reducing pressure on businesses would ultimately translate into higher productivity, increased employment, and improved revenue collection in the long term, as more enterprises grow and operate within the formal economy.
Economic analysts say Mbadi’s remarks signal a shift toward a more growth-oriented fiscal policy, particularly as the government seeks to balance revenue needs with public welfare ahead of the 2027 General Election.
However, they caution that the success of the proposed tax cuts will depend on how the government compensates for reduced revenue without increasing borrowing or cutting essential services.
