Speaking during a television interview on Sunday, December 21, 2025, Kiptoo said 48.5 per cent of revenue collected by the Kenya Revenue Authority (KRA) is used to pay debt-related obligations under what is known as Consolidated Fund Services (CFS).
These include interest payments, pensions, and other statutory expenses.
According to the PS, this means that nearly one out of every two shillings collected by the government goes directly to debt repayment, leaving limited room to fund development projects and essential services.
“Debt is actually a big problem. Almost 50 per cent of what we collect as ordinary revenue goes into servicing debt,” Kiptoo said.
Kiptoo disclosed that Kenya’s public debt currently stands at Ksh11.5 trillion, which represents 64 per cent of the country’s Gross Domestic Product (GDP).
In the current financial year alone, the government has set aside Ksh1.1 trillion to service interest payments on the national debt.
He warned that debt vulnerability remains a serious issue that must be addressed urgently.
The Treasury PS noted that government spending pressures continue to rise while revenues remain relatively low.
He attributed this to population growth and the expanding demand for public services.
Kenya’s population has grown from 54 million to 57 million in just three years, increasing pressure on sectors such as education.
Kiptoo revealed that education alone takes about Ksh767 billion, which is roughly 27 per cent of the national budget.
“Every year, about one million children are joining schools, and education continues to take a huge share of the budget,” he said.
Instead of increasing tax rates, the government plans to expand the tax base so that more Kenyans contribute to national revenue.
Kiptoo highlighted a major imbalance in tax contributions, noting that 3.2 million salaried workers paid Ksh600 billion in PAYE, while 17 million other working-age Kenyans contributed only Ksh18 billion in personal income tax.
“This shows that the burden of taxation is being carried mainly by salaried workers,” he said.
The government believes that bringing more people into the tax system will ease pressure on those already paying taxes.
Looking ahead, Kiptoo said the government plans to reduce VAT and lower corporate tax from 30 per cent to about 25 per cent, but only if tax base expansion is successful.
“Our goal is not to raise tax rates but to make taxation fairer by ensuring more people contribute,” he explained.
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