Photo: Government Spokesperson,Isaac Mwaura.
By Peace Muthoka.
The Government of Kenya has doubled down on its commitment to transforming the national economy with a series of new fiscal policies aimed at boosting job creation, promoting equitable growth and improving public services. In a press briefing held at the Kenyatta International Conference Centre (KICC), Government Spokesperson Hon. Sen. (Dr.) Isaac Mwaura (CBS) outlined key initiatives under the Bottom-Up Economic Transformation Agenda (BETA Plan), which has been in place for the past two years.
“The BETA Plan is built on the pillars of economic stability, equitable income distribution and job creation for all Kenyans,” Dr Mwaura said. “This agenda underscores our commitment to creating an economic environment that enables every Kenyan to prosper, now and in the future.”
At the heart of these reforms is Kenya’s commitment to sound fiscal policy. Dr Mwaura explained that the government aims to reduce the country’s reliance on foreign debt, and emphasised sustainable public debt management as a critical part of this plan. “We recognise the need to rely more on domestic revenue generation,” he noted. “Balanced fiscal measures are essential to ensure economic stability while reducing reliance on external financing.”
Key among the new initiatives is a comprehensive package of tax reforms designed to support sustainable growth and promote social equity without imposing undue burdens on ordinary Kenyans. The proposed tax laws have been formulated to ensure a fair and equitable tax system, with provisions to reduce tax expenditures and implement a justifiable tax amnesty. “Our focus is to create a tax system that fairly supports national priorities,” added Dr Mwaura. “We are allocating resources to projects that will benefit all citizens.”
To improve tax administration and compliance, the government introduced amendments to existing tax laws to create a balanced and transparent tax system in line with constitutional requirements. “These amendments are critical to achieving efficient revenue collection and ensuring that every Kenyan pays his or her fair share,” he said.
In addition, the government is introducing measures to strengthen county government financing and prevent potential service delivery challenges. Mechanisms have been put in place to ensure smooth funding even if there are delays in the division of revenue and county allocation bills. These legislative changes, such as the Tax Laws (Amendment) Bill, 2024 and the Tax Procedures (Amendment) Bill, 2024, were developed following extensive public consultations to ensure that Kenyans had the opportunity to provide feedback.
Significantly, the government’s reforms target the digital economy as a new area for tax expansion. Services such as ride-hailing, food delivery and freelance work will now fall under the definition of a ‘digital marketplace’ and be subject to tax. Dr Mwaura emphasised the importance of the move: “The growth of the digital economy requires a fair contribution to national revenue from all sectors, including digital services.”
Dr Mwaura also outlined changes that will improve benefits for Kenyan workers and businesses. Changes to non-taxable employee benefits and improved deductions for pension and healthcare contributions are expected to increase workers’ take-home pay while promoting health and retirement security. “These reforms directly support the well-being of Kenyan workers and help them save for a more secure future,” he said.
