We Pay VAT on Everything
Yet our schools lack teachers, hospitals have no medicine, and roads remain impassable. The tax burden falls heaviest on those who receive the least.
Submitted to Parliament of Kenya
MKNF Budget Memorandum to Parliament of Kenya 2026–2027
Cut Waste. Fund Survival. We Will Remember in 2027.
Submitted by Mt. Kenya Network Forum | May 2026
The Crisis in Numbers
The Problem We Are Naming
Ksh 995B+ Goes to Debt Interest
Over Ksh 995 billion is spent annually on interest payments while pending bills crush small businesses and counties struggle to deliver services.
Development Spending Bypasses Communities
Contractors and politically connected interests benefit while stalled projects and ghost structures remain visible monuments to misallocation.
County Funds Mismanaged
Despite billions devolved, counties spend over 50% on salaries and administration — leaving water, feeder roads, and farmers chronically underfunded.
Civic Accountability
Our 6 Demands to Parliament
Backed by PBO Data. Rooted in Community Reality.
Cut: Kshs 100 Billion
REDUCE TAX EXPENDITURE
FAULT: Government exempts VAT on luxury goods, premium beverages, and financial services — benefiting corporations, not citizens. Kshs 510.56 billion in total tax expenditures identified by the Parliamentary Budget Office.
Parliament Must:
- Remove VAT exemptions on non-essential luxury goods
- Remove exemptions on private education above income threshold
- Remove exemptions on high-income financial transactions
Redirect To: Youth employment programs + clearing SME pending bills + public hospital medicines
Cut: Kshs 50+ Billion
SLASH RECURRENT EXPENDITURE
FAULT: Recurrent expenditure reached Kshs 2.948 trillion in FY24/25. Wages grew 27%. Excessive foreign travel, workshops, and consultants do work that line ministries are already funded to do.
Parliament Must:
- Freeze non-essential hiring for 2 years
- Cut the foreign travel budget by 30%
- Ban consultancy contracts for routine policy work
Redirect To: Youth internships, skills training, and health supplies
Cut: Kshs 75 Billion
STOP FUNDING STALLED PROJECTS
FAULT: 10 MDAs have pending bills exceeding 50% of their budget — Roads: Kshs 130B, Energy: Kshs 57B, Higher Education: Kshs 73B. New mega-projects continue to be approved while existing ones rot.
Parliament Must:
- Impose a 1-year moratorium on new large infrastructure projects
- Mandate completion certificates before new project approvals
Redirect To: Settle verified pending bills for SMEs and local contractors
Ring-Fence: Kshs 137 Billion
RESTRUCTURE COUNTY FUNDING
FAULT: Despite Kshs 4.67 trillion devolved since 2012, poverty sits at 39.8%. Counties spend 50% on salaries and only 25% on development. Water funding is 5.3% despite ongoing drought crises across ASAL regions.
Parliament Must:
- Ring-fence equitable share: Kshs 50B feeder roads, Kshs 40B water/irrigation, Kshs 40B agriculture
- Enforce PFM Act: maximum 35% on salaries, minimum 30% on development
- Mandate county emergency funds for climate and disaster response
Redirect To: Feeder roads, water infrastructure, agriculture extension, county emergency funds
Reduce: Interest Savings
REDUCE COST OF BORROWING
FAULT: Public debt stands at 67.8% of GDP. Interest payments consume 36% of revenue — Kshs 995 billion. Government borrows commercially via Eurobonds at high rates instead of pursuing available concessional financing.
Parliament Must:
- Reduce gross external commercial borrowing to near zero
- Prioritize IDA, ADF, and bilateral concessional loans only
- Buy back high-cost domestic debt using concessional refinancing
Redirect To: Social protection + education + buy back high-cost domestic debt
Cut: 15% Across 5 MDAs
CUT UNDERPERFORMING MDA BUDGETS
FAULT: Thousands of "activity" targets are set with no link to outcomes. Post-harvest losses remain at 25% despite agricultural training budgets. Budget indicators exist with zero accountability for delivery.
Parliament Must:
- Cut admin budgets of MDAs that consistently miss core outcome indicators by 15%
- Replace activity-based budgeting with outcome-linked appropriations
- Publish quarterly performance scorecards for all MDAs
Redirect To: Direct cash transfers for PWDs, elderly, and vulnerable children
From the Communities
Voices from the Ground
We are told there is no money for your job, but there is always money for a first-class flight to Geneva or a week-long retreat at a beach resort. That is theft of our future.
— From the Youth of Mt. Kenya Region
We die of thirst while county headquarters have new furniture. We have no extension officer while the county employs 10 drivers for one executive. This must stop.
— From ASAL Communities
We are counted in indicators but not in budget allocations. Ramps, assistive devices, and inclusive education remain underfunded. We demand real money, not paperwork.
— Persons with Disabilities (PWDs)
The Fiscal Case
What Parliament Must Cut & Redirect
FY 2026/27 — Based on PBO Data
| Area | Fault | Cut (Kshs B) | Redirect To |
|---|---|---|---|
| VAT exemptions | Luxury goods & non-essentials exempted | 100B | Youth jobs + pending bills |
| Recurrent expenditure (travel, consultants, wage bill) |
Waste, duplication, foreign junkets | 50B+ | Skills training + health supplies |
| New mega-projects | Stalled, incomplete, contractor bias | 75B | Clear verified SME pending bills |
| County unconditional allocations | Salaries >50%, development <30% | 137B (ring-fence) | Feeder roads, water, agriculture, emergency funds |
| Commercial borrowing | High interest, debt trap via Eurobonds | Interest savings | Social protection + education |
| Underperforming MDA budgets | Activity-based, no outcomes accountability | 15% across 5 MDAs | Cash transfers for PWDs & elderly |
"We are not anti-government. We are anti-waste, anti-corruption, and anti-incompetence. You cannot tax a hungry youth, a struggling widow, or a pastoralist whose cattle have died of drought. Cut the fat. Fund our survival. Or we will remember in 2027."
— Mt. Kenya Network Forum