The National Treasury’s 2025/26 Finance Bill avoids the overt tax hikes that sparked nationwide protests in 2024. However, a closer look reveals a shift toward subtle revenue collection and austerity measures that could disproportionately burden ordinary Kenyans.
To raise an additional KSh 387 billion in revenue, the Treasury plans to increase fees for essential government services, including national ID cards, passports, driving licenses, birth and marriage certificates, business licenses, and Certificates of Good Conduct. While not labelled as taxes, these higher charges function as indirect taxation, hitting low-income earners hardest, as they rely on these services for work, travel, and legal compliance.
Kenya’s eCitizen platform, lauded for digitizing over 22,000 public services with plans to add 2,412 more, has streamlined access but is increasingly a revenue tool. Critics warn that this shift turns basic services into a toll-based system. “Digitizing services is progress, but when every click comes with a fee, it makes life harder for ordinary citizens,” said a civil society advocate monitoring the platform.
With over 13.5 million users, the platform’s mandatory use for many services risks excluding offline or low-income individuals while subjecting online users to growing transactional fees for routine tasks. The Bill offers small businesses a minor reprieve by allowing full deductions for tools and equipment in the year of purchase. However, this is overshadowed by the phasing out key tax incentives previously introduced to support struggling SMEs during crises. The Budget Policy Statement (BPS) confirms that businesses will lose several tax reliefs, undermining liquidity, job creation, and private sector growth.
Significant amendments to the Income Tax Act, VAT Act, Excise Duty Act, and Tax Procedures Act aim to improve tax administration but raise concerns. These changes will:
- Grant the Kenya Revenue Authority (KRA) greater powers to enforce compliance
- Restrict avenues for appealing tax assessments
- Accelerate penalties and asset seizures
- Enable faster access to taxpayer data
Critics warn these measures could erode financial privacy and due process, disproportionately affecting small businesses and individual taxpayers in disputes with the KRA.
The Finance Bill is set to be tabled in Parliament soon, with public input invited before its second and third readings. However, past experiences suggest that public participation may have little impact on the final document. Parliamentarians have been urged to keep debates within formal legislative channels, following Speaker Moses Wetang’ula’s caution to “discuss the Finance Bill in Parliament, not at funerals,” a remark seen as a warning against politicizing the process.
Last year’s Finance Bill triggered mass protests, led largely by young Kenyans, over controversial taxes on bread, diapers, and the creative economy. The backlash forced President William Ruto to withdraw the Bill and announce austerity measures. In 2025, the government appears to have learned to mask its approach, emphasizing “efficiency,” “consolidation,” and “fiscal discipline” while quietly shifting the financial burden through service fees and legal amendments.
The 2025/26 Finance Bill reflects a calculated strategy: avoid direct taxes but extract revenue through subtler means. While the government aims to reduce the fiscal deficit to 4.5% of GDP, critics argue that Kenya’s economic future cannot rely on policies that burden the citizens who have sustained the country through tough times.
Without active public participation and demands for fair amendments, the Finance Bill risks entrenching a regressive public finance system, with lasting consequences for equality, access, and economic recovery.
