Treasury CS John Mbadi has defended the government’s tax policies, arguing that they are not as burdensome as critics claim, particularly for middle-income earners.
Speaking at the National Assembly Mid-Term Retreat in Naivasha, Mbadi dismissed allegations of over-taxation as misleading. He presented an analysis of tax implications for individuals earning Sh60,000 per month, a common salary bracket for Kenya’s middle class. According to his breakdown, additional deductions from the Housing Levy (1.5%) and Social Health Insurance Fund (2.75%) amount to 4.25%—equivalent to Sh2,550.
He noted that before these deductions, individuals were already contributing 30% of their income to other taxes. Comparing the new structure to the previous National Hospital Insurance Fund (NHIF) contributions, he argued that the net increase for someone earning Sh60,000 is just Sh85 more per month. “Is that really over-taxation?” he questioned.
Mbadi’s remarks come amid rising public discontent over increasing deductions and the cost of living. Critics accuse President William Ruto’s administration of imposing excessive levies, including the Housing Levy and SHA under the 2023 Finance Act. However, Mbadi maintained that the concerns are exaggerated and urged Kenyans to assess the numbers objectively.
The government continues to justify these tax measures as essential to funding key initiatives like affordable housing and universal healthcare, but opposition leaders and economists warn that cumulative levies and inflation are straining disposable incomes and economic growth.
