Treasury CS Mbadi dismisses claims of new taxes on bread, milk, and unga in Finance Bill 2025

Treasury Cabinet Secretary John Mbadi has dismissed widespread claims that the Finance Bill 2025 introduces new taxes on basic goods like bread, milk, and unga, saying the information circulating online is false and not part of the actual Bill tabled in Parliament.

Speaking during a public engagement, Mbadi said the Finance Bill does not propose any value-added tax (VAT) on essential goods, and insisted the rumours are being pushed by people with personal interests who have previously benefited from tax loopholes.

“There is nowhere in the Bill where we are taxing bread, milk or unga. They are not even mentioned,” said Mbadi.

“That is not my bill. It’s a propaganda bill manufactured by the opposition, and unfortunately, some people have believed it,” he added.

The CS also dismissed claims that the government plans to increase VAT from 16 to 18 per cent or introduce taxes on newborn care.

“I’ve heard people saying we will tax babies. That’s not true. You can read the real Finance Bill from page one to the last page. There’s nothing like that,” he said.

Zero-rated goods

On the controversial issue of zero-rated goods, Mbadi clarified that while the government is removing some items from zero-rated status, they will not be subjected to VAT. Instead, they will be moved to exempt status.

“E-bikes and mobile phones are not being taxed. We’re just moving them from zero-rated to exempt because zero-rating is being abused. People make fake claims to KRA and take money that doesn’t belong to them,” he said.

He explained that in some cases, businesses collude with corrupt KRA officials to falsely claim input tax refunds, costing the public up to 500 billion shillings.

“That money being stolen is your money. You wake up every day, work hard, pay taxes, then someone fakes a claim and walks away with it,” Mbadi said.

Scrap metal dealers

On concerns about taxing scrap metal dealers, Mbadi said no new tax is being introduced. He clarified that the law now simply defines scrap trade as a source of income, which was previously unclear.

“There is no new tax on scrap dealers. The tax was already there, but we just clarified it. The same applies to suppliers to public institutions who are now subject to withholding tax,” he said.

The Treasury CS also defended the Finance Bill’s approach to tax exemptions for persons with disabilities and charitable organisations, noting that while these are allowed, there must be oversight to prevent abuse.

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“You have to apply through the right process. We approve many of these exemptions daily. But we can’t leave it open-ended because it will be abused,” he said.

He urged Kenyans to read the actual Finance Bill rather than rely on distorted versions shared on social media.

“Even in December, when I brought the Tax Laws Amendment Bill to Parliament, there was a lot of propaganda. Yet today, people are thankful that retirement pension is no longer taxable,” he said.

Mbadi acknowledged the economic frustrations among young people, saying the government is aware of the struggles of jobless youth and is working to create opportunities.

“One reason Gen Zs went to the streets is because many of them are desperate. They finish school and can’t find jobs. Our duty as the government is to create an environment where businesses can thrive and create employment,” he said.