He said the National Treasury is working closely with the Kenya Revenue Authority (KRA) to enhance compliance and seal revenue leakages across key sectors of the economy.
According to Mbadi, significant amounts of revenue are lost due to inefficiencies, tax evasion, and weak enforcement mechanisms.
“We believe there is still a lot of revenue that can be collected within the existing framework if we improve efficiency,” Mbadi said during the session.
He noted that the government’s decision comes amid concerns from the public and the business community over the rising cost of living and the impact of increased taxation in recent years.
By avoiding new taxes, the Treasury hopes to ease the burden on households and support economic growth.
At the same time, Mbadi emphasised the need for stronger enforcement measures to ensure that all eligible taxpayers meet their obligations.
He said KRA has been directed to widen the tax base by bringing more individuals and businesses into the tax net, particularly those operating in the informal sector.
The Cabinet Secretary also highlighted ongoing reforms aimed at modernising tax administration, including the use of digital systems to improve monitoring and compliance.
He said such measures would help reduce opportunities for tax evasion and increase transparency in revenue collection.
Members of the Budget and Appropriations Committee sought clarification on how the government intends to bridge the revenue gap without introducing new taxes.
In response, Mbadi reiterated that improving efficiency and curbing leakages would significantly boost collections.
He added that the government is also reviewing its expenditure to ensure prudent use of public resources, noting that better financial management will complement efforts to increase revenue.
The shift in strategy reflects a broader effort by the government to balance fiscal sustainability with economic stability.