Mbadi defends tax changes and blames corruption for public fear
Cabinet Secretary for National Treasury and Economic Planning John Mbadi has defended various tax changes that have been captured in Finance Bill, 2025.
Speaking during a televised public engagement event in Kibra that was aired by one of the local TV stations on the night of Monday, June 9, 2025, Mbadi clarified that the government has not introduced any new taxes onscrap dealers.
He also pointed out that persons living with disabilities and those involved in charity works can still seek tax exemption by applying through the normal process so as to avoid abuse.
“We are not bringing any new tax on scrap dealers. I am yet to see that in the Finance Bill. On persons living with disabilities and charity works, you can seek tax exemption if you are providing some of these facilities. But you know to avoid abuse, you have to apply through the normal process to the Cabinet Secretary through the line ministry, and we will approve it,” Mbadi said.
The former Orange Democratic Movement (ODM) National Chairman went ahead to say that the government has also not subjected e-bikes and mobile phones to Value Added Tax (VAT).
According to Mbadi, the government is only moving them from zero-rated to tax-exempt.
Discourage zero rating
He says that the main reason behind this move is because the country’s tax policy is to discourage the zero rating of commodities.
Mbadi also claimed that the people that are creating fear among Kenyans are the owners of big businesses who have been stealing from the Kenya Revenue Authority (KRA) over the years by making fictitious claims due to the zero rating of commodities.
“On e-bikes and mobile phones, we are not subjecting them to VAT, but we are moving them from zero-rated to exempt. The reason is simple: our tax policy is to discourage the zero rating of commodities. The people who are creating this fear among Kenyans are people who have, over the years, stolen public money by making claims at the KRA,” Mbadi said.
Mbadi on service delivery
Mbadi also said that the government will try to balance between servicing debts and providing services for the people.
He noted that the country has high debt servicing costs.
Mbadi revealed that Kenya spends over Ksh1.3 trillion annually on debt servicing, a figure that represents a significant portion of the national budget.
However, he noted that a country cannot service debts and fail to provide services to the people.
Mbadi emphasised that it is the people who give the country the taxes it uses to service its debts and that they would also expect the government to provide services.
“There are two things to balance here. First, as a country, we have a high debt stock and debt repayment, or debt servicing costs. We spent over Ksh1.3 trillion on debt servicing. But you cannot just service debts; much as you want to control debts, you cannot service debts, and you fail to provide services to the people because, again, those who are giving you taxes to service your debts would also expect you to provide services,” Mbadi said.
