CS Mbadi aims to raise Ksh150 billion in revenue through eco-tax and tax reforms

The government is preparing to reintroduce a controversial eco-tax as part of a new revenue-raising plan aimed at generating an additional Sh150 billion. The move is aimed at addressing the budget deficit created by the repeal of the 2024 Finance Bill.

These additional tax measures are outlined in the Taxation Amendment Bill, a 47-article bill that is about to be reintroduced in Parliament.

Finance Minister John Mbadi confirmed in an interview with mainstream media on Sunday that the eco-tax will be one of the provisions of the restoration. “We have proposed 47 amendments, including the eco-tax. However, we will remove the ban on sanitary napkins and other sensitive items.” He said.

To further increase tax revenue, the government plans to extend the tax amnesty by six months to allow more Kenyans to file their tax returns.

“Some people avoid paying taxes because of the deadline. We hope this extension will encourage more people to comply.” Mbadi said.

In addition, the government also intends to exempt certain basic commodities such as bread from taxes to save an additional Kshs 70 billion.

“We have been paying 525 million Kenyan shillings in tax refunds, some of which are fictitious. By waiving the bread tax, we will maintain revenue levels while reducing government expenditure,” Mbadi explained.

CS Mbadi also announced that a series of reforms at the Kenya Revenue Authority (KRA) will bring in an additional Ksh105 million in revenue by “closing all loopholes through automation of the system”.

India’s Ministry of Finance is currently stepping up efforts to implement these tax measures before September 30. Kimani Kuria, chairman of the Indian Parliament’s Finance Committee, said: “We are waiting for those recommendations from the Treasury Department so we can get started.”