Treasury Updates Parliament on Proposed Cuts on PAYE & VAT 

Hello and welcome to the Money News Roundup Newsletter, where we are covering considerations by the government to cut VAT to 15%. We also cover the government's move to cap SHA’s overseas treatment cover to Ksh500,000.

Treasury PS Updates MPs on Plan to Cut VAT & Lower PAYE  

The government is considering cutting Value Added Tax (VAT) to 15 per cent and reviewing income tax rates as part of wider tax reforms aimed at easing pressure on households, Treasury Principal Secretary Chris Kiptoo has said.

However, he noted that any reductions would depend on improved economic conditions and stronger tax administration to protect public finances.

Speaking at a National Assembly leadership summit in Naivasha, Kiptoo said the proposals are anchored in the National Tax Policy and the Medium-Term Revenue Strategy, which seek to simplify tax laws, harmonise rates and expand the tax base. 

He said the government’s long-term objective is to lower taxes, but warned that cutting rates without expanding the number of taxpayers would strain public finances amid high demand for government spending.

As reported by Eastleigh Voice, Kiptoo acknowledged Parliament’s role in approving tax measures, noting that recent proposals have sparked public backlash, including Gen Z-led protests in 2023 and 2024. 

To cushion the impact of potential tax cuts, Treasury is focusing on improving tax administration, boosting non-tax revenue and exploring innovative financing options such as infrastructure funds.

Already, banks and SACCOs are pushing for the increase of tax-free pay from Ksh24,000 to Ksh40,000. According to the institutions, the move will make Kenyans take home more pay and motivate the employees who are demotivated by high taxes.

The restructure of PAYE had been earmarked for last year’s Finance Bill, but Treasury CS John Mbadi noted that KRA failed to meet its target, hence the move to shelve the plan to this year.

SHA Caps Overseas Treatment at Ksh500K

The Social Health Authority (SHA) will now only cover overseas treatment for medical procedures unavailable in Kenya.

As reported by Citizen Digital, a Benefits Package and Tariffs Advisory Panel has identified 36 such procedures, with the authority capping payments at a maximum of Ksh500,000 per case.

Health Cabinet Secretary Aden Duale says the move aims to curb medical tourism, corruption, and the heavy drain on public funds seen under NHIF. Patients will no longer be referred abroad for procedures that can be done locally.

The listed interventions include liver, bone marrow and paediatric kidney transplants, complex congenital heart surgery, stem cell treatment and advanced cancer care.

Only empanelled foreign hospitals will receive Kenyan patients. The ministry says the reforms will protect resources, strengthen local healthcare capacity and ensure sustainability for 29 million registered Kenyans.

Govt Targeting 2 Million Investors in Kenya Pipeline IPO

The government is targeting a record two million retail investors for the Kenya Pipeline Initial Public Offer (IPO), which aims to raise Ksh106.3 billion by floating 11.8 billion shares, representing a 65 per cent stake.

As reported by the Business Daily, each investor category—retail, institutional, and foreign—has been allocated 20 per cent of the shares, with retail investors receiving 2.4 billion shares.

To make the IPO affordable, Kenya Pipeline undertook a 1,000-for-one share split, bringing the price to Ksh9 per share, allowing participation with as little as Ksh900.

Lead Transaction Advisor Belgrad Kenne said the focus is on deepening and democratising the capital markets by maximising retail participation rather than prioritising funds raised. 

The month-long offer, running from January 19 to February 19, gives ordinary Kenyans ample time to invest. Subscription results will be announced on March 4, with the bell-ringing ceremony set for March 9.

Auctioneers Raid KUSCCO Offices Over Ksh108.8 Million RUPSA Sacco Debt

Auctioneers raided the Kenya Union of Savings and Credit Co-operatives (KUSCCO) offices on Thursday, disrupting operations as they attempted to recover an alleged Ksh108.8 million owed to RUPSA, a regulated non-withdrawable deposit-taking Sacco.

The raid followed a Co-operatives Tribunal order issued on January 19, 2026, after KUSCCO allegedly failed to provide a clear payment plan despite being issued with a seven-day notice. 

RUPSA Treasurer Edward Gacheru said the amount is significant for the Sacco, whose total assets stand at Ksh1.1 billion.

Immediate Auctioneers said the process had begun with the attachment of movable assets, though the items were unlikely to cover the full amount.

However, police officers intervened and halted the exercise, ejecting the auctioneers despite the active court order. 

KUSCCO officials declined to comment at the scene, but Chair David Mategwa later told Citizen TV that audits were ongoing to establish accurate Sacco deposits, accusing RUPSA of failing to submit its records.

Meanwhile, as also reported by the Business Daily, the government has appointed Deputy Commissioner for Cooperative Development Peter Kiama as the new KUSCCO CEO, taking over from Arnold Munene.

NSE Bond Investors Make Ksh176 Billion as Secondary Market Surges

Investors who sold Treasury bonds on the secondary market at the Nairobi Securities Exchange (NSE) earned a record Ksh176 billion in profits, nearly five times the Ksh36.1 billion earned in 2024. 

Falling yields on new bond issuances boosted demand and prices for older, higher-paying papers, such as tax-free infrastructure bonds (IFBs), which sold at premiums of Ksh109–Ksh124 per unit of Ksh100.

The secondary market turnover hit a record Ksh2.71 trillion, up from Ksh1.5 trillion in 2024, driven by retail and institutional investors seeking capital gains and higher yields amid declining Central Bank rates. 

Investors who held bonds continued to earn interest between 10 and 18.46 per cent annually. Increased participation by households, retail investors, and fund managers has enhanced market liquidity, supported by the CBK’s digital trading platform, Dhow CSD.

Government debt totals Ksh6.85 trillion, with commercial banks, pension funds, and insurance companies as the largest holders. Read more

Clinical Officers to Receive Ksh10,000 Salary Hike and Arrears in Signed CBA

Clinical officers in Kenya will receive a salary increase of around Ksh10,000 or more following the signing of the country’s first-ever Collective Bargaining Agreement (CBA) with county governments. 

As reported by the Standard, the deal includes a fixed Ksh4,000 risk allowance and additional increments of Ksh6,000–Ksh15,000 depending on job group, affecting basic salary and house allowance. 

Payments will include seven months of arrears dating back to July 2025, reflected in February salaries.

The agreement also extends contracts for Universal Health Coverage (UHC) and Global Fund clinical officers, transitioning them to permanent, pensionable terms from July, while covering 19 months of owed salary. 

Funded partly by Ksh8.9 billion in county allocations, the CBA establishes Kenya’s first comprehensive employment framework, sets grievance mechanisms, and ends a 36-day nationwide strike, marking a milestone in devolved healthcare.

Ethiopia Invites Kenyan Firms to Tap Growing Capital Markets

The Ethiopian capital markets regulator is inviting Kenyan stockbrokers, investment banks, and other intermediaries to participate in its rapidly developing market, which opened to foreign investors in 2025. 

According to the Business Daily, the Ethiopian Capital Markets Authority (ECMA) oversees the ecosystem, alongside the Ethiopian Securities Exchange (ESX), the Central Securities Depository, and the Capital Markets Tribunal.

Kenyan firms like Dyer & Blair and Faida Investment Bank, which already operate regionally in Uganda and Rwanda, could bring local investors to Ethiopia and explore cross-listing opportunities with Nairobi Securities Exchange-listed companies.

 ECMA encourages entrants to partner with existing Ethiopian firms rather than set up operations from scratch. Since its July 2025 launch, ESX has listed Wegagen Bank SC and Gadaa Bank SC, marking Ethiopia’s first steps toward a functional, investor-friendly capital market.

Smart TVs and Streaming Boxes Become New Cybercrime Targets in Kenya

Smart TVs and internet-connected set-top boxes are emerging as new targets for cybercrime in Kenya, as attackers shift focus from smartphones and computers. The Communications Authority of Kenya (CA) recorded 310,009 cyberattack attempts on end-user devices in October–December 2025, a 303% rise from the previous quarter. 

Android TVs and streaming boxes are often vulnerable due to outdated firmware, weak default passwords, sideloaded apps, and insecure home networks. 

Malware can steal credentials, spy on users, or turn devices into botnets for click fraud or Distributed Denial-of-Service (DDoS) attacks. Experts advise updating software, using trusted apps, securing Wi-Fi, and changing default passwords. Read more

Office of Deputy President to Spend Ksh338.8 Million on Flights

The Office of the Deputy President plans to spend Ksh338.8 million on flights in the year ending June 2026, despite government austerity measures. 

As reported by Nation, procurement plans show Ksh150.2 million for helicopters, Ksh144 million for commercial flights, and Ksh44.6 million for chartered planes. 

The allocation surpasses budgets for the Presidential Secondary School Bursary Scheme (Ksh100 million) and the Women Enterprise Fund (Ksh350 million).

The DP’s office overshot its six-month recurrent budget by Ksh219.3 million, spending Ksh3.2 billion against an annual Ksh2.97 billion allocation. Spending on flights alone exceeds last year’s travel budget by Ksh88.35 million.