Gachagua issues TOUGH DEMANDS to Ruto gvt before reading Ksh.4.8T 2026/7 Budget & Finance Bill 2026

Added: 2026-06-05

[00:00:00]While this may appear neutral on paper, it effectively increases costs because producers can no longer recover input VAT.

[00:00:09]The inevitable result is higher prices to consumers, farmers, and businesses. At a time when Kenya should be encouraging renewable energy, agricultural productivity, and digital inclusion, these proposals move in the opposite direction.

[00:00:24]The proposed 16% VAT on digital payment service provider commissions is another regressive mission.

[00:00:32]Kenya has become a global leader in financial inclusion because mobile money and digital payments have reduced transaction costs and expanded access to financial services.

[00:00:44]There will be no more pain at There will There will be more pain at M-Pesa shops and ATM machines.

[00:00:52]Taxing these services will increase costs for traders, SMEs, schools, hospitals, and ordinary citizens who rely on mobile payments. And ultimately, these costs will be passed on to the consumers and could reverse years of progress in financial inclusion.

[00:01:10]Further, the proposal to increase excise duty on mobile phones from 10% to 25% is particularly damaging to young people and low-income households. Mobile phones are no longer luxury goods.

[00:01:24]They are essential tools for education, businesses, communication, financial services, content creation for youth and agencies, and job searching.

[00:01:36]Increasing their cost will widen the digital divide and disproportionately affect students, entrepreneurs, and rural communities.

[00:01:45]We suddenly learn the finance bill also proposes a 30% growth withholding tax for what is called non-resident landlords, but effectively it It the Kenyans in diaspora.

[00:01:58]While intended to raise revenue, the practical effect is likely to be higher rents for businesses and commercial tenants as landlords pass these costs to occupiers.

[00:02:08]This will increase operating costs for businesses and contribute to higher consumer prices.

[00:02:14]This is unfairly targeting our diaspora communities who should be investing back home while they work abroad.

[00:02:20]Where do you want these Kenyans to retire to?

[00:02:23]Or where do you want them to invest?

[00:02:26]Equally concerning is the proposal introducing a 60% minimum deemed dividend threshold.

[00:02:33]This measure risks penalizing businesses that retain earnings for expansion, working capital, debt repayment, and an investment.

[00:02:43]Rather than encouraging growth and job creation, firms will be forced to distribute funds that would otherwise be used for investment.

[00:02:51]From a governance perspective, one of the most troubling provisions is the proposed removal of protections against agency notices during active tax appeals. This will allow tax authorities to freeze bank accounts and enforce collection actions while disputes are still before tribunals or courts.

[00:03:11]Such powers will businesses before they have an opportunity to be heard, undermining due process, investor confidence, and the constitutional principle of fair administrative action.

[00:03:24]The Finance Bill further proposes tax filing timelines from June 30th to April 30th and introduces stricter objection deadlines, which include weekends and public holidays, increasing compliance costs for businesses and taxpayers. These measures may appear administrative, but they are They affect businesses that lack the resources of larger corporations and will struggle to comply within shortened timelines.

[00:03:55]The cumulative effect of these proposals is deeply worrying.

[00:03:59]At a time when Kenyans are already grappling with a high cost of living, rising statutory deductions, expensive credit, unemployment, and weak economic growth, the Finance Bill 2026 places additional pressure on households and businesses.

[00:04:17]Instead of stimulating production, encouraging investment, and creating jobs, many of the proposals risk making Kenya a more expensive place to live, work, invest, and do business.

[00:04:30]We strongly hold that a people-centered Finance Bill would focus on expanding the tax base, sealing revenue leakages, promoting investment, protecting taxpayers' rights, supporting farmers and businesses, and creating an environment where economic growth and natural naturally generates sustainable tax revenues. Unfortunately, the current bill leans too heavily toward extracting more from an already strained economy, while doing too little to address the structural weaknesses that continue to undermine growth and prosperity.

[00:05:06]The Finance Bill presents represents a continuation of a failed philosophy.

[00:05:12]Whenever revenue targets are set, the government responds by introducing new taxes, new levies, new compliance obligations, and new penalties, instead of confronting waste, corruption, and inefficiency within government itself.

[00:05:28]The danger is clear.

[00:05:30]Kenya cannot tax its way to prosperity.

[00:05:32]As Winston Churchill argued, a nation trying to tax itself into prosperity is like a man standing in a bucket and trying to lift himself up by the handle.

[00:05:43]In light of the danger the people of Kenya are exposed to through this budget estimates and punitive finance bill, DCP would rather have done the following to cushion Kenyans, create a prosperous nation, and dignify the Kenyan people.

[00:06:00]One, immediately we would stop the housing levy deductions to give relief to the payslip. Return dignity to the employed and extra expenses on employers.

[00:06:12]Two, we would propose that the government cuts wasteful and unessential expenditure. State machinery must tighten its own belt before it demands sacrifice from the public. What does Kenya shillings 17 billion allocation to state house stand for?

[00:06:27]We would reduce it to Kenya shillings 3 billion.

[00:06:30]Thirdly, debt growth must be slowed and then disciplined borrowing must be linked to high impact impact development, not recurrent consumption.

[00:06:40]Kenya must move toward a more sustainable fiscal posture with a credible plan to reduce the deficit over time.

[00:06:48]Fourthly, education, agriculture, and health must be protected as priority sectors. Agriculture should be funded as the engine of food security, rural employment, and lower inflation.

[00:07:00]Health should be funded as a core human right and an investment in productivity.

[00:07:06]Five, the government should pay pending bills to businesses and suppliers. That would restore liquidity, support SMEs, and stimulate activity across the economy.

[00:07:17]Six, taxation must be broadened fairly rather than imposed repeatedly on the same shrinking base.

[00:07:24]Compliance should be improved through modernization, transparency, and trust, not through punitive pressure on household already stretched to the limit. Seven, parliament must claim its oversight role. Budgets should be interrogated line by line, not passed as routine exercise. The legislation must insist on accountability, realistic revenue assumptions, and the protection of vulnerable sectors.

[00:07:52]Oversight is not obstruction, it is stewardship.

[00:07:56]Finally, the government must restore accountability. Every shilling spent should be explainable. Every project should be measurable. Every ministry should be held to performance, not rhetoric.

[00:08:09]In addition to the above, we will restructure the budget as follows.

[00:08:13]Reduce the entire budget from Kenya shillings 4.8 trillion to Kenya shillings 3.7 trillion.

[00:08:21]In agriculture, we would increase from 97 billion to 300 billion.

[00:08:28]Health, increase from 167.4 billion to 450 billion.

[00:08:34]Public administration, we would reduce from 354.9 billion to 250 billion.

[00:08:41]And borrowing, we would reduce from 1.44 trillion to zero borrowing.

[00:08:48]As deep as DCP, we demand as follows. First, we demand a significant increase in funding for agriculture and health care, as I've already explained.

[00:09:01]Agriculture country receives only 2.0% of the national budget, despite employing the majority of Kenyans and driving food security. We call for a progressive increase to at least 6% of the budget, approximately 300 billion Kenya shillings, as an immediate step towards achieving the 10% Maputo Declaration target. These resources should be directed toward irrigation, extension services, fertilizer support, value addition, storage facilities, aggregation centers, and market access to farmers.

[00:09:35]Health currently receives only 3.5% of the budget, far below the 15% Abuja declaration target. We demand an increase to at least 9.5% of the budget to strengthen the county hospitals, improve staffing, ensure medicine availability, and make health care affordable and accessible for Kenyans. Secondly, we demand a reduction in administrative and recurrent expenditure.

[00:10:02]Public administration currently approx- consumes approximately 354.9 billion, while State House and other administrative expenditures continue to grow. The government must lead by example by reducing non-essential travel, hospitality, consultancies, duplication of agencies, and other administrative overheads. We propose a minimum 30% reduction. That's about 150 billion in non-essential administrative expenditure, with the savings redirected agriculture, health, education, and job creation.

[00:10:39]Thirdly, we demand realistic and credible revenue targets.

[00:10:43]For three consecutive years, the government has allocated only 80% of its projected tax revenues.

[00:10:50]Yet, it continues to budget on increasingly ambitious assumptions. The Treasury must align revenue projections with actual economic performance and stop using unrealistic targets to justify new taxes and levies. A credible budget is built on realistic numbers, not wishful thinking. Number four, we demand a reduction in borrowing and a clear path to fiscal sustainability. The 2026-2027 budget proposes a deficit of approximately 1.144 trillion, financed entirely through new debt. Kenya's public debt has already reached Kenya shillings 13 trillion, while debt servicing consumes more than half of government revenues. We call for a balanced budget with zero provision for new debt.

[00:11:37]Fellow Kenyans, if our country is to recover, we need a national reset built on discipline, fairness, and productive investment. This means restoring confidence in public finance.

[00:11:50]It means using public money to unlock private activity rather than crowd it out. It means making agriculture profitable, health care accessible, education effective, and business financing affordable.

[00:12:05]It also means understanding that economic growth is not created by slogans.

[00:12:10]Growth comes from productivity. It comes from predictable policy. It comes from trust between the state and citizens. It comes from a government that spends with restraint and plans with honesty. We demand a budget that puts people before politics and production before consumption.

[00:12:28]Kenya's future depends not on how much the government spends, but on how wisely it is spends it. The farmer, the young people, the teacher, the health care worker, the entrepreneur, the police, and the civil servants searching for opportunities must once again become the center of national economic policy. We call on all elected representatives of the people to listen to the people and reject in total this budget estimate and finance bill 2026-2027.

[00:12:58]Fellow Kenyans, this budget should have been an opportunity to reset our fiscal path. Instead, it risks deepening the same pattern of debt dependence, weak priorities, and citizen frustration. We reject the idea that the national development is achieved by taxing people more while protecting inefficiency. We reject the idea that debt is an alternative to discipline. We reject the idea that a government can build prosperity by ignoring its citizens.

[00:13:28]The future of Kenya will not be built by a budget that feeds bureaucracy. It will be built by a budget that empowers production, protects the vulnerable, rewards honesty, and places people before politics.

[00:13:41]That is the Kenya we deserve. That is the Kenya we must demand. And that is the Kenya that we must build. Finally, I urge the people of Kenya that we remain vigilant. We must call out all elected leaders supporting this reckless budget estimate and punitive Finance Bill 2026-27.

[00:14:00]Keep a record of all those who will stand with the Kenyan people and those who will stand with this reckless proposal and regime.

[00:14:07]The day of reckoning is 10th August.