Kenya's Sh4.8 trillion budget for fiscal year 2026/27 faces significant strain, with a staggering Sh1.3 trillion allocated to debt repayment, impacting development spending.

• A substantial portion, Sh1.3 trillion, of the Sh4.79 trillion budget is earmarked for interest payments on loans.
• The National Treasury, led by Cabinet Secretary John Mbadi, presented these estimates to the National Assembly.
• Despite efforts to manage the fiscal deficit and debt, the country's public debt stands at Sh12.29 trillion, with projections of continued borrowing.

The Kenyan government has proposed a new 5 percent tax on imported second-hand clothing, known as mitumba, under the draft Finance Bill 2026.

• A proposed 5 percent tax on income from imported mitumba clothing and footwear.
• The Government of Kenya is seeking to expand its tax base, especially in the informal sector.
• Analysts caution this could increase prices for affordable clothing, impacting millions of Kenyans and small traders.

Kenya's proposed Finance Bill 2026 is set to end tax relief for Kenya Airways (KQ) and significantly expand the digital tax net.

• The bill proposes ending the withholding tax exemption for Kenya Airways on payments made to non-resident service providers.
• Key organizations like Kenya Airways, payment processors, software firms, and banks will be impacted by broader definitions of "management or professional fee" and "royalty."
• The proposed changes aim to increase government revenue collection across strategic sectors including aviation, fintech, software, and commerce.

An audit by Auditor-General Nancy Gathungu has revealed that the National Treasury illegally diverted Sh30 billion in Eurobond proceeds to cover domestic debt shortfalls, violating the bond's subscription agreement.

• Sh30 billion in Eurobond proceeds were used to cover Treasury Bond shortfalls.
• The National Treasury and Auditor-General Nancy Gathungu are key entities involved.
• The government also defaulted on five bilateral loans for security contracts totaling Sh15.42 billion as of June 30, 2025.