How is the 2024/25 budget allocated across different sectors such as healthcare, education, infrastructure, and security?
What percentage of the budget is dedicated to development projects versus recurrent expenditures?
Are there any significant increases or decreases in funding for key sectors compared to the previous year?
Kelvin OnyangoKifaru
How does the 2024/25 budget plan to generate revenue
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The 2024/25 budget was drafted with the mindset that the finance bill will pass. Since that's not going anywhere, the budget team has to go back to the drawing board and redo everything from scratch. They also need to ensure there's adequate time for public participation in the whole process becauseRead more
The 2024/25 budget was drafted with the mindset that the finance bill will pass. Since that’s not going anywhere, the budget team has to go back to the drawing board and redo everything from scratch. They also need to ensure there’s adequate time for public participation in the whole process because the budget is meant yo serve the people. Doing otherwise will only push away the people from the current administration. This government got into power on the back of hustlers and should have their needs prioritised. Anything aside from that will be a huge disservice to the voters and all the people of Kenya. These are tough economic times and it needs a finance plan that puts that into consideration.
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The “24/25 budget plan” can refer to various budgeting frameworks depending on context, but generally, it’s a way to allocate resources or revenue targets evenly or strategically across categories or time periods. Since your question is about how a 25/25 budget plan generates revenue, I’ll outline aRead more
The “24/25 budget plan” can refer to various budgeting frameworks depending on context, but generally, it’s a way to allocate resources or revenue targets evenly or strategically across categories or time periods. Since your question is about how a 25/25 budget plan generates revenue, I’ll outline a common interpretation and how such a plan might work in a business context:
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What is a 25/25 Budget Plan?
It often means splitting your budget or revenue goals into four equal parts of 25% each.
For example, allocating 25% of your resources to marketing, 25% to product development, 25% to operations, and 25% to sales.
Or, it could mean setting quarterly revenue targets at 25% each, aiming for steady growth.
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How Does It Generate Revenue?
1. Balanced Investment Across Key Areas
By dedicating equal attention and resources to critical functions (marketing, sales, product, operations), you create synergy that drives growth.
Marketing brings in leads, product development improves offerings, sales convert leads, and operations ensure smooth delivery.
2. Predictable Cash Flow and Growth
If the 25/25 plan refers to quarterly revenue goals, it encourages steady, manageable growth rather than boom-or-bust cycles.
This helps with planning, cash management, and investor confidence.
3. Risk Management
Distributing resources prevents over-reliance on a single area. If one segment underperforms, others can compensate.
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Example:
A startup might say:
25% of budget to digital ads → generate leads
25% to product improvements → increase customer satisfaction and retention
25% to sales team → convert leads into customers
25% to customer support → build loyalty and repeat business
By tracking revenue tied to each segment, they refine spending and maximize returns.
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See lessHere’s how Kenya’s 2024/2025 budget plans to generate revenue: --- 📊 1. Ambitious Revenue Targets 0-1The budget aims to collect KSh 3.02 trillion in ordinary revenue, representing approximately 14.3% of GDP, contributing to a total estimated revenue of about KSh 3.343 trillion including AIA (ApproRead more
Here’s how Kenya’s 2024/2025 budget plans to generate revenue:
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📊 1. Ambitious Revenue Targets
0-1The budget aims to collect KSh 3.02 trillion in ordinary revenue, representing approximately 14.3% of GDP, contributing to a total estimated revenue of about KSh 3.343 trillion including AIA (Appropriation‑in‑Aid) and grants.
379-0The fiscal deficit is forecast at around KSh 720 billion, roughly 4.1% of GDP.
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🧾 2. Tax Policy Reforms (Moderate Increases, New Measures)
While the budget avoids sweeping new taxes, several targeted reforms are included:
504-1Annual motor vehicle tax set at 2.5% of vehicle value, with a floor around KSh 5,000
Increased excise duties:
Betting, gaming, and lotteries raised to 20%.
Higher duties on cigarettes and liquid nicotine.
788-3Higher excise on telecoms, internet data, and certain money transfer fees.
VAT and income tax tweaks:
VAT registration threshold raised from KSh 5 million to 8 million.
Input VAT deductions limited to taxable supplies.
Allowances for employees working out-of-station increased to 5% of monthly earnings.
1040-4Pension benefits reorganized under an exempt‑exempt‑exempt (EEE) regime.
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🧰 3. Medium‑Term Revenue Strategy (MTRS): Administrative Reforms
The government is banking on stronger compliance, broader coverage, and tech-driven enforcement:
1411-1Goal: Increase tax-to-GDP ratio from ~14.1% to 20% by 2027.
Measures include:
Expansion of electronic invoicing systems (eTIMS, GAVA Connect).
Simplified PAYE, VAT, and rental income returns.
1687-2Audits, reduced exemptions (“tax expenditures”), and inclusion of digital content creators and informal sector players.
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🕵️ 4. Crackdown on Tax Evasion & Hidden Income
The government is focusing on enforcement—not new taxes:
1993-1Proposed access to financial and mobile data (later rejected by Parliament over privacy concerns) to identify hidden income.
2267-0Plans to collect an additional KSh 30 billion via improved compliance, especially targeting high-net-worth individuals.
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📉 5. Spending Cuts & Efficiency Gains
Revenue efforts are mirrored with fiscal discipline:
Reduction of tax refund abuse and trimming of recurrent spending.
2427-2Zero-based budgeting, accrual accounting, and e‑procurement platforms to improve transparency and reduce wastage.
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🔍 Summary Table
Revenue Strategy Key Action
Tax policy tweaks Vehicle tax, excise duty increases, VAT threshold changes
Regulatory and administrative reforms e-invoicing, digital compliance, plugging tax loopholes, auditing digital economy
Enforcement tools Enhanced KRA access (initially proposed), targeting evasion beyond new taxes
Fiscal consolidation Spending cuts and system reforms to boost efficiency and confidence
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✅ Bottom Line:
2747-6No blanket tax hikes: The budget steers clear of mass taxation after last year’s mass protests and withdrawal of controversial measures.
Instead, it focuses on broadening the tax base, tightening compliance, and improving administrative efficiency.
The goal is to raise more revenue without triggering social unrest—but implementation remains the challenge.
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Would you like a breakdown of specific sectors like digital economy, informal trade, or MSMEs—and how they fit into this revenue drive?
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