Kenyans could soon feel fresh pressure on their pockets after Parliament approved a major expansion of the national budget, even as promised tax relief remains out of reach.
The National Assembly of Kenya has endorsed an additional Ksh 363 billion in supplementary estimates, pushing the 2025/2026 budget to a record Ksh 4.6 trillion – up from the Ksh 4.3 trillion initially presented by the National Treasury Kenya.
The increase surpasses the Treasury’s earlier proposal of Ksh 287 billion, signalling deeper spending at a time when the cost of living remains high.
Why the Budget Is Growing
According to Budget Committee Chair Samuel Atandi, the additional funds are largely aimed at clearing pending obligations in critical sectors such as education, health, and security.
“People are already employed so we cannot stop paying their dues; we also had unforeseen events,” Atandi explained.
Education takes a significant share of the increase, with the Teachers Service Commission set to receive an extra Ksh 24 billion, bringing its total allocation to Ksh 411 billion.
The health sector will also see a boost, with funding rising by Ksh 26 billion—from Ksh 138 billion to Ksh 164 billion—amid growing demand for services and ongoing reforms.
Security Spending Rises Sharply
Security agencies are among the biggest beneficiaries of the revised budget. An additional Ksh 53 billion has been allocated to the sector, increasing its total funding to Ksh 418 billion.
Within this:
- The defence department will receive Ksh 24 billion
- The National Intelligence Service will get Ksh 10 billion
- The National Police Service will receive Ksh 7.5 billion
Atandi defended the increase, citing evolving threats. “Security challenges are there; they emerge each and every time there is sophistication in crime and we must keep up,” he said.
Pressure Shifts to Tax Collection
With spending rising, attention now turns to revenue collection. Lawmakers have placed the burden squarely on the Kenya Revenue Authority (KRA) to meet ambitious targets and finance the expanded budget.
“We want KRA to use the money we have given them to improve systems,” Atandi noted, hinting at tighter enforcement and possibly broader tax measures.
However, the budget process has drawn criticism, particularly over the use of Article 223 of the Constitution of Kenya, which allows the government to spend funds without prior parliamentary approval in emergencies.
Critics argue that repeated reliance on this provision risks undermining fiscal discipline and transparency in public spending.
Tax Relief Delayed
Adding to public anxiety is the government’s decision to delay promised tax cuts. John Mbadi has walked back earlier assurances that low-income earners would see relief before the end of the current financial year.
In February 2026, Mbadi had proposed:
- Raising the tax-free income threshold from Ksh 24,000 to Ksh 30,000
- Reducing PAYE from 30% to 25% for those earning between Ksh 30,000 and Ksh 50,000
The plan was expected to benefit over one million workers. However, the Treasury now says the changes will not be implemented immediately. Instead, they will be incorporated into the Finance Bill 2026, effectively pushing relief into the next financial year.
Mbadi cited limited time as the main reason for the delay, saying it would be impractical to introduce separate legislation so close to the budget cycle.
Households Left Waiting
The postponement comes at a difficult time for many households already grappling with rising inflation and increased statutory deductions, including NSSF contributions, the Social Health Insurance Fund (SHIF), and the Housing Levy.
The situation also revives memories of the 2024 protests, when proposed tax hikes under William Ruto triggered widespread demonstrations led by young Kenyans, some of which ended in a deadly crackdown.
As the government moves toward finalising the Finance Bill 2026, the expanded budget raises a critical question: will increased spending translate into improved services—or will taxpayers be forced to shoulder an even heavier burden?
For now, with no immediate tax relief in sight and expenditure continuing to climb, many Kenyans are bracing for tougher economic times ahead.
