Why every Kenyan must engage in budget process

Public participation in Kenya’s budget process is far more than a formality. It is one of our most effective tools to shape policies that protect public health and promote accountable governance. When citizens, experts and civil society do not engage, critical gaps remain and opportunities to advance the public good are lost.

Two weeks ago, I took part in an important consultative meeting with the national budget team at the National Treasury. Alongside civil society organisations under the Kenya Tobacco and Nicotine Tax Coalition (KTNTC), led by the Kenya Tobacco Control and Health Promotion Alliance (KETCA), and youth advocates, we presented evidence-based proposals for the Finance Bill 2026.

In my capacity as a health taxes consultant and excise taxes expert working closely with KTNTC, I contributed to recommendations calling for stronger taxation and robust administrative measures on tobacco and nicotine products. The need is pressing: Kenya must act decisively to address the rapid rise of e-cigarettes, nicotine pouches and other emerging products that are increasingly targeting young people through digital marketing.

Kenya has made notable progress in recent years with excise duty adjustments. However, significant gaps persist when measured against the World Health Organization’s Framework Convention on Tobacco Control (FCTC) Article 6 guidelines, which Kenya has ratified.

These guidelines recommend that excise taxes should constitute at least 70 per cent of the final retail price, with simple, harmonised tax structures applied equally to all tobacco and nicotine products, regular adjustments to maintain affordability reductions, and robust enforcement supported by the FCTC Protocol to Eliminate Illicit Trade in Tobacco Products.

Excise tax

In contrast, Kenya’s current excise tax share on cigarettes remains well below this 70 per cent benchmark in most segments, while emerging nicotine products such as e-liquids and pouches face lighter, fragmented rates that keep them affordable and accessible — particularly to youth.

The Finance Act 2023 repealed the automatic annual inflation adjustment mechanism for specific excise duties, a move intended to provide greater predictability for manufacturers and consumers. This has eroded the real value of existing taxes and reversed earlier gains in affordability control.

Weak enforcement compounds the problem: current penalties are often too lenient, allowing illicit traders to pay modest fines and resume business almost immediately. This undermines tax collection, reduces the effectiveness of legitimate price increases, and perpetuates the availability of cheaper, untaxed products that fuel consumption and health risks.

Our proposals, grounded in rigorous analysis using the Tobacco Excise Tax Simulation Model (TETSiM) — a practical, Excel-based tool developed by the University of Cape Town — use Kenya-specific data on prices, taxes, consumption, inflation and income growth to forecast how proposed tax changes will affect retail prices, affordability, consumption levels (especially among youth), smoking prevalence, and government revenue over multiple years. These simulations, aligned with WHO FCTC best practices, demonstrate that well-designed tax increases can make tobacco and nicotine products less affordable, meaningfully reduce consumption, and generate sustainable domestic revenue.

We recommended substantial excise tax increases to reach at least 70 per cent of retail price, a progressive multi-year escalation of 20 to 100 per cent annually to reduce affordability, full harmonisation across all nicotine and tobacco products to close loopholes, and the reinstatement of automatic inflation indexing. We further proposed a strengthened multi-agency enforcement framework, including sensitisation of the Judiciary and Parliament, backed by truly dissuasive penalties: significantly higher fines, imprisonment for repeat offenders, and revocation of trading licences.

Tobacco and nicotine use

These measures offer a timely opportunity to reduce the burden of tobacco and nicotine use, prevent non-communicable diseases, safeguard young people, and mobilise much-needed resources for public health and development priorities. In an era of declining foreign aid and rising public debt, health taxes play a crucial role in domestic resource mobilisation.

They generate sustainable, predictable revenue that can be directed towards essential public health services, Non-Communicable Disease (NCDs) prevention programmes, and broader national development goals. Strong health taxes therefore deliver a powerful double benefit: healthier citizens and more reliable domestic financing.

My involvement in the Treasury meeting underscored an important reality: meaningful public participation allows evidence and public interest to guide policy decisions. Every Kenyan — whether a young person concerned about emerging products, a health professional, or a citizen committed to better-funded services — has a valuable role to play in the budget process.

Public participation strengthens transparency and accountability. With the Finance Bill 2026 now under consideration, this is a critical moment for Kenya. We must seize the opportunity to advance policies that protect lives and secure our future.

The time to act with purpose is now.

Ms Muthaura is an excise taxes expert and health taxes consultant with Foresight Advisory Africa. With over 20 years’ experience in tax policy and administration, she is a member of the UN Subcommittee on Health Taxes and collaborates closely with the Kenya Tobacco and Nicotine Tax Coalition (KTNTC). Views expressed are her own. [email protected].