The Finance Bill 2025 is set to proceed to President William Ruto for assent after the National Assembly passed it on Thursday.
In a decision taken on the floor of the House, lawmakers agreed to pass the Bill after considering key reports from the Finance and Planning Committee, led by Molo MP Kuria Kimani.
The MPs unanimously agreed to approve the Bill, which the government intends to use to finance its budget for the session.
However, the House dropped the clause that sought to grant the Kenya Revenue Authority access to personal and financial data, which had been the subject of contentious debate.
At the heart of the dispute was Clause 52, which proposed to repeal Section 59A(1B) of the Tax Procedures Act. This section currently protects businesses from being compelled to share their customers’ personal data with tax authorities.
Treasury Cabinet Secretary John Mbadi had repeatedly defended the move as a necessary step to improve tax compliance, citing the challenges of voluntary compliance and the tendency among even well-off individuals to under-declare their incomes.
The document had outlined proposed amendments to different taxation laws in Kenya, including the Value Added Tax Act, the Excise Duty Act and the Income Tax Act.
The Bill further contains proposals to amend the Miscellaneous Fees and Levies Act, highlighting import declaration fees and railway development levies for specific goods.
According to the cabinet, the current bill seeks to seal loopholes related to tax expenditures that have historically been exploited to siphon funds from public coffers.
Last year, President Ruto was compelled to withhold assent to the Finance Bill 2024 following a wave of nationwide protests triggered by the government’s controversial revenue-raising proposals. This saw tens of youthful demonstrators shot and killed, allegedly by the police, with some cases actively before the court of law.
This was after MPs ignored concerns from protesters about their objections and went ahead to pass the bill.
Meanwhile, Treasury CS Mbadi outlined a raft of income tax changes in the 2025/2026 Budget, aimed at boosting revenue collection while easing the burden on Kenyan workers and businesses.
While presenting the budget estimates before the National Assembly, Mbadi announced that the Finance Bill 2025 would introduce reforms to eliminate ambiguities in tax laws and promote equity within the tax system.
The government set the 2025/2026 budget at Ksh4.29 trillion, which it aims to finance through revenues, loans, and grants from financial partners.
