Parliament to Close Public Participation on Finance Bill 2026 Amid Fresh Tax Debate

As the clock ticks down on public participation for Kenya’s Finance Bill 2026, attention is now shifting to Parliament, where lawmakers are expected to begin sorting through hundreds of submissions from Kenyans, businesses, lobby groups and industry players reacting to the government’s latest tax proposals.

The public submission window officially closes Monday evening, May 25, bringing to an end two weeks of heated debate around the Bill that could shape the country’s tax landscape in the 2026/27 financial year.

The exercise, led by the National Assembly’s Departmental Committee on Finance and National Planning, was opened on May 11 in line with constitutional requirements demanding public involvement in lawmaking.

At the centre of the discussions is the Finance Bill, 2026, sponsored by Molo MP and Finance Committee Chairperson Kuria Kimani.

The proposed law seeks to amend several major tax statutes, including the Income Tax Act, VAT Act, Excise Duty Act, Tax Procedures Act, Stamp Duty Act and the Road Maintenance Levy Fund Act.

Unlike the explosive Finance Bill 2024 that sparked nationwide protests and eventually forced President William Ruto to withdraw it, this year’s Bill has been described as more technical, though still packed with measures likely to affect ordinary Kenyans in their daily lives.

One of the most talked-about proposals is the planned 25 per cent excise duty on mobile phones. The proposal immediately caused anxiety online, with many Kenyans fearing that smartphones could become more expensive at a time when digital services are deeply woven into everyday life.

Treasury Cabinet Secretary John Mbadi has, however, defended the proposal, insisting the government is not introducing an entirely new burden but restructuring existing charges.

According to the Treasury, the current tax structure on imported phones combines VAT, customs duty, Import Declaration Fees and the Railway Development Levy, pushing the cumulative burden to nearly 55 per cent. The government argues that the proposed system would instead charge excise duty only when a device is activated on a mobile network.

Still, critics remain unconvinced, especially young Kenyans who rely heavily on affordable smartphones for business, content creation, online work and education.

The Bill also widens taxation in the digital economy. Proposed amendments seek to expand the meaning of “royalty” to include payments linked to digital payment platforms, software distribution systems and transaction networks, potentially affecting fintech firms and online service providers.

Cryptocurrency and virtual assets have not escaped the government’s radar either. Under the proposals, virtual asset service providers would be required to comply with reporting obligations under the Virtual Asset Service Providers Act, 2025, as Kenya moves to tighten oversight in the rapidly growing digital asset space.

New levies

Other measures in the Bill include new levies on plastics, coal and vintage vehicles, higher excise taxes on tobacco products and changes to VAT treatment for electric mobility products, solar batteries and animal feed inputs. Tax experts warn that shifting some products from zero-rated to VAT-exempt could quietly increase production costs for businesses since companies would no longer recover input VAT.

Meanwhile, the Kenya Revenue Authority is also set to receive expanded powers under the proposed law, including the ability to generate pre-filled tax returns using information collected through its electronic systems. Filing timelines for taxpayers would also be shortened under some of the proposed amendments.

In its public notice inviting views from Kenyans, Parliament stated: “NOW THEREFORE, in compliance with Article 118(1)(b) of the Constitution and Standing Order 127(3), the Clerk of the National Assembly hereby invites the public and stakeholders to submit memoranda on the Finance Bill.”

Once the submission window closes, the Finance and National Planning Committee will retreat to review memoranda before preparing a report for debate in the National Assembly. MPs are expected to propose amendments, retain or reject clauses before the Bill is eventually sent to President Ruto for assent.