CS John Mbadi defends Ruto’s tax policies, claims over-taxation narrative is misleading
National Treasury Cabinet Secretary CPA John Mbadi has come out strongly to defend the government’s tax policies, dismissing claims of over-taxation as a misleading narrative
National Treasury Cabinet Secretary CPA John Mbadi has come out strongly to defend the government’s tax policies, dismissing claims of over-taxation as a misleading narrative.
Speaking during the National Assembly Mid-Term Retreat in Naivasha on Friday, CS Mbadi, one of the ODM experts tapped by President William Ruto from the Orange Democratic Movement (ODM), argued that the current tax regime is not as burdensome as critics suggest, especially for middle-income earners.
In a detailed presentation on the state of the economy to MPs, Mbadi broke down the tax implications for individuals earning KSh 60,000 per month, a salary bracket often associated with Kenya’s middle class.
He explained that the introduction of the Housing Levy and the Social Health Insurance Fund (SHA) has been misrepresented as excessive taxation.
“So, now, I am not in the opposition. I am at the center of government. I am the minister for finance. So, how do you expect me again to start talking about the negatives? It’s not possible. I have to talk about the positives. And by the way, can I just give you an example? You know, there is this thing of saying that we are overtaxing.
I have looked at the taxes because I was trying to see how I can make the paslips better. So, I have looked at it and please look at this with me. If you are earning 60,000, 60,000, those who are hurt by the taxes are those what Kenyans may call that earn super-salary, but when you start adding it, you don’t see it as super. But the middle class, not so much.
Let’s take 60,000 for example,” Mbadi stated.
He emphasised that without these deductions, individuals would have surrendered 30 percent of their income to other taxes.
However, with the new amendments, the 30% is retained, and the only loss is 70 percent of the KSh 2,550, which translates to KSh 1,785.
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Mbadi further compared the current deductions to the previous National Hospital Insurance Fund (NHIF) contributions, noting that someone earning Ksh 60,000 previously paid Ksh 1,700 monthly.
“When you remove that from the Ksh 1,785, you are only paying Ksh 85 more. Is that over-taxation?” he posed.
The Finance Minister’s remarks come amid growing public discontent over the rising cost of living and increased deductions from salaries.
Critics have accused the President William Ruto-led government of burdening citizens with multiple levies, including the controversial Housing Levy and SHA, which were introduced as part of the 2023 Finance Act.
However, Mbadi insisted that the narrative of over-taxation has been exaggerated and urged Kenyans to look at the numbers objectively.
“Those of us in government will now expose this narrative so that people can understand that it is not as bad as it is being portrayed,” he said.
Mbadi’s defense of the tax regime climaxes the government’s efforts to fund its ambitious development agenda, including affordable housing and universal healthcare.
However, the opposition and some economists have argued that the cumulative effect of these levies, coupled with rising inflation, is squeezing disposable incomes and hurting economic growth.
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