The national government will consider reducing valued-added tax (VAT) from the current 16 per cent to 14 per cent, cutting corporation tax from 30 per cent to 25 per cent and lowering pay-as-you-earn (PAYE) rates, Treasury Cabinet Secretary (CS) has said.
The proposal, coming at a time when the Kenya Revenue Authority collected Sh313.37 billion in domestic VAT and Sh488 billion in corporation taxes as at June 20, 2024, is part of the Treasury’s medium-term revenue strategy aimed at improving tax administration, enhancing compliance and expanding the tax base.
“I will surprise you; in the medium term, we want to reduce tax rates. We are not looking at increasing taxes,” said CS Mbadi during the unveiling of the 2025/26 Budget Preparation Process in Nairobi.
