Kenya approves 2026 budget without new taxes; record investments in education, health, and fuel subsidies.
Kenya's 2026 Budget
Written by: Ayman Ragab
The Kenyan government has approved the 2026 Finance Act and the 2026 Appropriations Act, in a move it said provides the legal framework and resources needed to fund development priorities, boost job creation, improve living standards and invest in the country’s future.
The government stressed that the new finance law does not include imposing new taxes, but rather focuses on enhancing tax fairness by tightening tax compliance, closing legal loopholes, and ensuring that individuals and companies pay the obligations imposed on them in accordance with the law.
Combating tax evasion
The authorities stressed that the tax reforms aim to combat tax evasion, offshore financial schemes and leaks that affect public revenues, without imposing additional tax burdens on citizens.
The government denied what it described as misleading information circulating about the law, stressing that it does not impose taxes on freehold land, used clothing, or bottled water, nor does it include any amendments to rental income tax, nor does it impose new taxes on mobile payment transactions (M-PESA), phone and data credit, or locally manufactured packaging materials for basic products.
On the public spending front, the new budget allocated the largest share to the education sector at 784 billion Kenyan shillings, compared to 526 billion Kenyan shillings in 2022. Funding for the health sector also increased from 132 billion Kenyan shillings to 175 billion Kenyan shillings, while allocations for the agriculture sector increased from 44 billion Kenyan shillings to 63 billion Kenyan shillings.
Fuel price fluctuations
To mitigate the impact of fuel price volatility on citizens, the government has allocated 21.5 billion Kenyan shillings to support fuel price stability, as part of a package of economic measures aimed at protecting citizens' purchasing power.
The Supplemental Appropriations Act for 2026 was approved during a formal ceremony held at the Presidential Palace in the capital, Nairobi.
