At the heart of KRA's modernizing agenda is a robust embrace of technology, manifested in several innovative digital instruments. Chief among these is the anticipated rollout of auto-populated VAT returns. This feature is poised to be a significant game-changer for countless businesses and individuals, fundamentally streamlining the often-complex process of Value Added Tax filing and dramatically reducing human errors. As articulated by CS Mbadi, the overarching goal is to achieve "seamless, accurate tax filing." By automating the pre-filling of VAT forms, the KRA seeks to simplify what has historically been a time-consuming and error-prone task, thereby minimizing administrative burdens and fostering a more user-friendly tax environment. This move is consistent with global best practices, where tax authorities increasingly leverage data analytics and automation to enhance efficiency and encourage higher compliance rates. The envisioned outcome is a tax system that is not only more precise but also liberates taxpayer time and optimizes KRA’s operational resources, underscoring a forward-thinking approach to revenue mobilization.

This digital drive isn't an isolated event. It builds upon and amplifies the technological focus evident in the preceding 2024/2025 fiscal year budget. That budget also highlighted an intent to expand the tax base and enhance revenue collection, notably through measures like adjusting VAT on specific goods and services to capture more economic activity. The push for auto-populated returns represents a concrete mechanism to realize these ongoing objectives, moving beyond simply expanding what is taxed to making how taxes are filed more efficient.

However, KRA's digital ambitions extend into a far more sensitive and contentious realm: the proposed expansion of its powers to access citizens' personal financial data. Embedded within the 2025 Finance Bill is a proposal to repeal Section 59A(1B) of the Tax Procedures Act. This crucial section currently acts as a legal firewall, preventing tax bodies from compelling businesses to disclose sensitive customer personal data. Its deletion would effectively grant KRA unprecedented access to a wealth of private financial information, including mobile money transactions and bank records.

This proposition has, predictably, ignited a fierce national debate, raising profound concerns about privacy violations, the potential for state surveillance, and the inherent risk of information abuse. Critics, including civil society organizations, legal experts, and privacy advocates, argue that such expansive powers, if unchecked, could lead to unwarranted intrusions into the private lives of ordinary citizens, potentially eroding fundamental constitutional rights under the guise of fiscal enforcement. Questions abound: How will this vast trove of data be safeguarded? What robust mechanisms will be in place to prevent its misuse or unauthorized access? And how will individual privacy be protected in an environment where a government agency wields such comprehensive financial oversight? This contentious proposal marks a significant escalation from previous fiscal years, including 2024/2025, where the focus was on tax rate adjustments and base expansion, rather than direct access to individual transaction data on such a broad scale.

Mbadi candidly admitted that even high-earning individuals, including himself, might be prone to under-declaring income if not for stringent enforcement. "If it were up to us, even those earning well like me would not be honest in paying taxes. I will probably return 50-60 percent of what I am supposed to," he stated, a striking admission that resonated with many who grapple with the perceived inequities of the tax system. He underscored that "convenience," particularly when money is involved, often discourages people from fulfilling their tax obligations without robust follow-up. "People love convenience… If you just let Kenyans pay taxes at will without being followed up, they will not,” he asserted, highlighting the necessity of tight enforcement to overcome human tendencies towards evasion.

For Mbadi, the pursuit of tax evaders, particularly those who deliberately conceal their true financial positions, is not a discretionary choice but a fiscal imperative. He emphasized that the Constitution mandates tax payment for the effective functioning of the nation. Without comprehensive access to financial data, he argued, KRA's capacity to accurately assess tax liabilities and identify discrepancies is severely limited, leading to significant revenue leakages that ultimately impact the government’s ability to provide essential public goods and services. This aggressive stance on data access represents a more direct and potentially intrusive approach to revenue collection compared to the 2024/2025 budget's focus on broader tax reforms and increased rates, suggesting a growing urgency to combat evasion more forcefully.

Adding another layer to the fiscal discourse, the Budget Statement read by CS Mbadi revealed a subtle yet significant adjustment in the nation’s total spending projections for the upcoming fiscal year. While the 2025/2026 Budget Estimates initially tabled in Parliament indicated a total government spending of Sh4.24 trillion, Mbadi's subsequent reading presented a revised figure: Sh4.29 trillion. This increment, though seemingly minor in the grand scheme of trillions, has "raised eyebrows" among observers, prompting questions about the underlying reasons for the sudden shift and the implications for fiscal planning and transparency.

This figure can be directly compared to the 2024/2025 budget, which stood at approximately Ksh 4.0 trillion (originally Sh3.9 trillion, revised upwards to Sh4.0 trillion). The progression from a Sh4.0 trillion budget in 2024/2025 to a projected Sh4.29 trillion in 2025/2026 indicates a consistent upward trend in government expenditure. Both budgets are anchored in the Bottom-Up Economic Transformation Agenda (BETA), prioritizing sectors like agriculture, MSMEs, housing, healthcare, and the digital superhighway. The 2024/2025 budget's allocations, for instance, significantly boosted health services (aiming for Universal Health Coverage) and allocated substantial funds to infrastructure and education. The increase to Sh4.29 trillion for 2025/2026 suggests continued, possibly expanded, investment in these priority areas, though the exact shifts in allocation within the larger sum would require a deeper dive into the specific budgetary documents. Both fiscal years, however, share a common thread of focusing on fiscal consolidation to reduce the deficit, with the 2024/2025 budget targeting a reduction to 3.3% of GDP from 5.7%. The new budget will likely aim to continue this trajectory, even as total spending rises, implying an even more ambitious revenue collection target.

Despite his strong advocacy for stricter enforcement, Mbadi also articulated a crucial long-term vision that transcends coercive measures: responsible public spending. He underscored that the ultimate solution to bolstering tax compliance lies in judiciously utilizing tax revenues. His perspective is that when citizens witness their contributions being managed transparently and effectively, leading to tangible improvements in public services and national development, a more willing and voluntary compliance will naturally emerge. His sentiments echoed the broader fiscal policy goals for both the 2024/2025 and 2025/2026 budgets, which aim for economic recovery and sustainable development, ultimately contingent on building public trust.