NAIROBI — Kenya’s lawmakers are entering the final stretch of debate over the country’s contentious 2025 Finance Bill. After weeks of public outcry, closed-door consultations and tense questioning of top tax officials, Parliament’s Finance Committee is preparing to table its final report this week.
The committee, chaired by Molo MP Kimani Kuria, has been holed up in a retreat drafting the report. It follows weeks of back-and-forth with government agencies, taxpayers and advocacy groups over proposed changes to the tax regime.
At the heart of the controversy are fresh proposals from the National Treasury that many fear will push an already burdened public further into economic distress.
Key Questions on Pensions and Privacy
One of the flashpoints is a proposed adjustment to how retirement benefits are taxed. During a recent meeting with MPs, Kenya Revenue Authority Deputy Commissioner Maurice Oray said the change is intended to treat pension and gratuity payments more equally.
“The aim is to empower workers to retain more of their money upon retirement,” Mr Oray told the committee. But some lawmakers are sceptical.
They pressed for clarity on how the government would prevent employers from gaming the system by disguising ordinary salaries as gratuity payouts to avoid tax.
Another sticking point is Clause 52, which seeks to give KRA broader access to personal data to help it enforce tax laws. MPs from both sides of the aisle voiced concern.
“This provision threatens the constitutional right to privacy,” said Turkana South MP John Ariko. “Yes, compliance matters. But not at the expense of rights guaranteed under Article 31.”
Tax Uncertainty Worries Business
MPs also raised the issue of tax policy instability. Some noted that Kenya’s tax rules often change without proper impact studies, only to be reversed a year later. This, they warned, was creating “an unpredictable and anxious environment” for businesses and citizens alike.
Butula MP Joseph Oyula urged a more measured approach to reclassifying tax categories, particularly for goods moving from zero-rated to exempt status. “We need a process grounded in data, not guesswork,” he said.
Treasury Presses Ahead
The National Treasury, represented by Cabinet Secretary John Mbadi, has defended the proposals as necessary to expand Kenya’s revenue base and meet public spending needs. The Bill, presented to Parliament on 30 April, proposes changes to the Income Tax Act, VAT Act and Excise Duty Act.
If passed, the new tax measures would come into effect on 1 July.
Next Steps
With public participation now complete, all eyes are on Parliament. MPs will debate the final report in the coming days, with a vote expected before the end of June.
The stakes are high. For many Kenyans, this year’s Finance Bill is more than just numbers. It’s a test of whether the government is listening or pushing ahead regardless of the pain it may cause.
