Kenya cannot afford to be a welfare state, says Mbadi
National
By
Zena Achieng
| May 26, 2026
Treasury Cabinet Secretary John Mbadi on Tuesday, May 26 defended the proposed Finance Bill 2026 before a hostile crowd at Nairobi’s Jeevanjee Gardens, saying Kenya lacked the resources to operate as a welfare state.
Addressing traders, boda boda riders, students and activists at a public forum organised under the Bunge la Mwananchi platform, Mbadi said the government was focused on stabilising the economy without introducing punitive taxes.
“We cannot be a welfare nation because we do not have the economic muscle to be one,” Mbadi said.
He said the government was seeking to reduce reliance on borrowing while funding essential services such as healthcare, roads and jobs.
The remarks came days after Mbadi told Parliament that the Finance Bill 2026 would not introduce any new taxes or raise existing rates, a sharp break from the 2024 Finance Bill, which proposed tax hikes worth Sh346 billion and triggered nationwide demonstrations in June 2024.
At least 50 people were killed in the unrest before President William Ruto withdrew the bill entirely.
"Since I took office at the National Treasury, I assured Kenyans that we shall strive to reduce the tax burden. In this respect, the Finance Bill 2026 has neither proposed new taxes nor raised any tax rates," the CS told MPs last week.
On fuel prices, Mbadi said the increase was part of a wider global trend affecting countries including Rwanda, Burundi, Ethiopia and Mozambique.
He said the fuel subsidy fund had Sh17 billion at the start of the crisis, with Sh6.2 billion used in April to cushion consumers. Another Sh5 billion, he said, had been set aside for the following month.
He also defended the reduction of fuel levies from 16 per cent to 8 per cent, saying the move had cost the government Sh12 billion in monthly revenue.
On taxation, the CS called for the Kenya Revenue Authority to have powers to scrutinise financial transactions to ensure wealthier Kenyans pay more taxes. "KRA should have authority to check financial transactions. Those who have more money should pay higher tax than those who do not.”
Mbadi also disclosed that the Judiciary’s budget had been increased and that talks were ongoing with the World Bank for a loan of more than Sh20 billion to renovate court facilities, including the Supreme Court.
Kenya cannot afford to be a welfare state, says Mbadi