Former Deputy Chief of Staff Eliud Owalo, in charge of Delivery and Government Efficiency has proposed slashing income tax from 35 percent to 20 percent, VAT from 16 percent to 10 percent, and running a zero budget deficit, arguing that punitive taxation has left 40 percent of Kenyans below the poverty line.
He said digital reforms once raised daily revenue from Sh60 million to Sh1 billion.
Speaking during a live television interview on Sunday, Owalo said the Kenyan tax regime is not enabling the business community, describing it as punitive to individual taxpayers.
He argued that high taxes have directly contributed to rising poverty, noting that 40 percent of Kenyans are living below the poverty line under an unpalatable tax regime and spiraling debt.
At the core of his proposals is a dramatic reduction in taxes.
On his intention to run for President in 2027, Owalo said that upon assuming office, he would bring down income tax from 35 percent to 20 percent, cut VAT from 16 percent to 10 percent, abolish digital tax, and stabilise corporate tax at an optimal level of about 5 percent for five years.
He insisted the approach would ease pressure on households and businesses while expanding economic activity.
To critics who question how the government would fund its operations after such cuts, Owalo offered a blunt response.
Seal revenue leakages, do away with corruption and then bring in more people into the income bracket, he said.
He noted that out of a possible 35 million Kenyans who could pay tax, only 9 million are eligible because they are the only ones with disposable income.
Owalo’s solution is to re-engineer the value chains at the grassroots, pushing resources to youth, women, and the Jua Kali sector.
By increasing incomes, he argued, more Kenyans would enter the tax bracket, allowing the state to collect enough domestic revenue even with lower rates.
Debt, he said, has been misused as a substitute for revenue. “Today we are using debt as a revenue-raising measure, which should not be the case,” Owalo argued, warning that borrowing to fund recurrent spending was unfair to future generations.
His alternative is uncompromising: “I will run a zero budget deficit in my government. Cut your clothes according to your size.”
He dismissed scepticism about the feasibility of such discipline saying he is an economist, he knows what he's talking about, adding that Kenya budgets for projects which are not a priority and then turns to debt to finance them.
This, he argued, fuels economic rent-seeking rather than development.
Owalo’s manifesto also leans heavily on digital governance, drawing on his experience as Cabinet Secretary for ICT.
He said that when he joined government, only 350 services were available on the digital platform, but by the time he left, they had already digitalised over 20,000 government services.
The result, he said, reduced physical interaction and fewer opportunities for corruption.
He cited revenue collection as proof. “Government used to collect about 60 million shillings per day,” Owalo said.
“By the time I left that ministry, government was then able to collect an average of Sh900 million to Sh1 billion each and every day,” attributing the increase solely to sealing leakages through digitalisation.
On corruption, Owalo promised a hard line. “I will run a government that will not tolerate any form of corruption,” he said, vowing to reopen all cases of mega corruption from 2010 to date.
He also pledged forensic investigations to trace stolen assets, insisting they would be seized whether they are within the Kenyan borders or beyond.
Beyond economics, Owalo framed his proposals as a return to accountability. Leaders, he said, must be honest with the people, give report cards on promises made, and admit where targets were missed.
“That is leadership,” he argued. “You own up and you become accountable for purposes of results.”
