Nairobi, June 10 -- National Treasury Cabinet Secretary John Mbadi faces a new dilemma in funding the Sh4.8 trillion 2026/27 budget in the wake of a shaky revenue base because of the negative impact of the US-Israel war with Iran, which has triggered tax concessions amid higher spending needs.

The National Treasury has been forced to halve value-added tax (VAT) on fuel and could potentially make pay-as-you-earn (PAYE) rate reductions to cushion workers even as it is faced with pressure to mobilise more resources for projects.

A year ago, Mbadi was forced to settle for less aggressive tax proposals in the backdrop of youth led/Gen Z protests in June 2024, where measures proposed to mobilise only an extra Sh30 in the 2025/26 fiscal year a...