John Mbadi's Bold Blueprint: Boosting Kenya's Revenue Without Raising Taxes

In a recent vetting session before Parliament’s Committee on Appointments, Treasury Cabinet Secretary nominee John Mbadi unveiled a strategic plan to increase Kenya's revenue without imposing new taxes. If confirmed, Mbadi's approach focuses on three key measures designed to bolster the nation's finances while addressing systemic inefficiencies.

Revamping KRA Infrastructure for Enhanced Revenue Collection

One of Mbadi's primary goals is to overhaul the Kenya Revenue Authority's (KRA) current infrastructure. Citing the need for a "state-of-the-art system," he emphasized the importance of sealing the loopholes that enable corruption and hinder effective tax collection.

“KRA is like a cow which we milk without feeding,” Mbadi remarked, highlighting the need for structural changes. “The system KRA is using at the moment needs engineering. Coming up with new taxes isn’t the solution to revenue mobilization; instead, we should focus on improving the efficiency of the tax collector.”

Treasury Cabinet Secretary nominee John Mbadi

This move aligns with President William Ruto's directive to KRA to double its annual collections from Ksh.2.4 trillion, recorded in the 2023/24 financial year, to Ksh.4 trillion. The additional revenue is intended to help service national debts and fund critical government projects.

Tapping Into Climate Change Financing

Mbadi’s second strategy involves leveraging climate change financing to alleviate pressure on the national budget. He pointed out that Kenya has already made strides in this area, securing USD 259 million to support environmental initiatives across 47 counties.

“Climate change financing is an underutilized resource with about Ksh.167 trillion (USD 1.3 trillion) available globally. We must tap into that money to reduce pressure on the budget,” Mbadi stated. He further noted that this approach could also spur job creation, particularly for the youth, by funding the Ministry of Environment’s budget.

Embracing Public-Private Partnerships (PPP) for Sustainable Development

In a bid to further reduce budgetary strain, Mbadi advocated for the adoption of Public-Private Partnerships (PPP) in both small and large-scale projects. He stressed that involving private sector players would not only expedite project implementation but also allow the government to redirect funds to other critical areas.

“PPPs are the way forward, but the public needs to understand them better,” Mbadi explained, referencing the public backlash against the proposed PPP deal with Adani Holdings to upgrade Jomo Kenyatta International Airport (JKIA). “We need to be transparent and clear, with a proper framework in place to gain public trust and ensure success.”

Mbadi also underscored the importance of transparency and accountability in the budgeting process, urging for practical measures to curb government waste and ensure every shilling is well spent.

“I hear you, there’s a lot of opulence,” he acknowledged, adding, “We must contain wastage but do so practically. Reducing operating expenditure and making our budget more transparent are crucial steps.”

As Mbadi awaits the House's approval, his proposed strategies signal a shift towards innovative financial management that could reshape Kenya's economic landscape.